Persfi/32/dp1st/mark2nd

JANE BRYANT QUINN

Single people, unite. You have nothing to lose but the “singles penalty” in the federal income tax.

You’ve probably never heard of it. Everyone shouts about the “marriage penalty.” But singles pay more than marrieds do, on the same size income. Congress’ $792 billion tax-cut proposal would make the disparity worse.

Under the famous marriage penalty, two working people might pay more in taxes as a couple than they would as two singles. But that applies only to a portion of married taxpayers. The rest pay less as a couple than they would as two singles.

Here’s how singles and marrieds compare, under the tax code today:

? One-earner couples get a bonus. Take a man with a taxable income of $50,000. As a single, he’d have paid $10,712 in federal tax last year. If he married and his wife didn’t work, he’d have paid $8,502 a tax cut of 21 percent. Not bad, just for saying “I do.”

? Two-earner couples get a bonus when one of them earns 70 percent or more of the family income.

For example, take two people with taxable incomes of $35,000 and $15,000. On their two single incomes, their tax would total $8,766. As a couple reporting $50,000 jointly, they’d pay $8,502. That’s a saving of $264.

? The marriage penalty hits two-earner couples whose incomes are fairly close. They pay more as a couple than they would as two singles.

For this example, take two people with taxable incomes of $30,000 and $20,000. As singles, their tax would total $7,508. As a $50,000 couple, however, they’d pay $8,502 $994 more.

Why does that happen? Tax brackets are to blame. As a single person, the lower earner is taxed in the 15 percent bracket. But when those earnings are piled on top of a spouse’s income, they’re moved into the higher 28 percent bracket. So taxes rise.

? Singles generally pay taxes at a higher rate. On a $50,000 taxable income, their tax comes to $10,712 $2,210 more than married couples have to pay.

The tax bill proposed by Congress helps married couples in two ways. First, for couples who use the standard deduction: Your deduction would rise to twice the amount that one single person gets. Today, it’s only 67 percent more.

Second, for all couples: Part of your income would be taxed at a slightly lower rate. To understand this particular tax cut, you need to know how federal income taxes work.

Imagine that your taxable income is divided into layers, like those on a layer cake. The lowest layer of your income (up to $21,175 for marrieds last year) is currently taxed at 15 percent. The next layer (up to $51,150) is taxed at 28 percent, and so on up to the highest layer, which is taxed at 39.6 percent.

Congress would cut the tax on the lowest layer to 14 percent. It would also let couples pay that low rate on a larger slice of their income. Singles would get a similar but smaller break.

Result: The marriage penalty would be smaller and the marriage bonus larger, especially in the lower brackets. Singles would pay a little less, but relative to couples, they’d be worse off.

There’s no fix for these disparities, says Daniel Feenberg, research associate at the National Bureau of Economic Research in Cambridge, Mass. That’s because they arise automatically from two popular principles of taxation.

First, most of us think that people with higher incomes should pay a higher rate of tax. Second, we think that couples with the same taxable incomes should pay the same amount of tax, no matter which family member earned the money. Mathematically, that means that your marital status will affect your tax.

Congress dictates the size of the disparities. Singles got tax breaks in 1969, when the boomers were largely single. Now, couples have the upper hand.

“We don’t do tax policy in this country anymore, we do tax politics,” says Christopher Bergin, editor of Tax Notes, a tax policy journal based in Arlington, Va.

Maybe Congress should give singles a tax write-off for dates that lead to marriage. I can see the ads now. “Single female, seeking tax partner, for life.”

Snooping on you

When we worry about who might be spying on our private lives, we usually think about the feds. But the real snoops are in the private sector and their snooping is even protected by law.

Take your phone records. The government has to get permission from the Justice Department before it can look at them. But under a court decision rendered in mid-August, your phone companies can sell your personal records to an outside marketing firm, with minimal notification to you.

The marketers can find out where you called, when and for how long, and use that information to sell you other products.

By law, phone companies can’t sell your records without your approval. The Federal Communications Commission defines “approval” as meaning affirmative consent: You have to be asked if you want your records sold, and you have to say yes.

US West, plus a host of other phone companies, challenged this interpretation before the federal court of appeals in Denver, and won. The FCC will now appeal.

If the FCC loses again, here’s what will happen: You’ll get a notice, in fine print, stuffed into your phone bill along with other notices, saying that your personal records will be sold unless you say no.

Many customers won’t read the notice. That will constitute “approval,” and your records will be up for sale.

You have almost no protection today from businesses that want to use your personal records for profit. For example, no federal law shields “transaction and experience” information mainly, the details of your bank and credit-card accounts. Your bank can disclose them, at will, to telemarketers or other commercial users. (A few states have privacy laws, notably Florida, but they’re limited.)

In addition, no law protects your activity on the Internet. Most Web sites openly (or surreptitiously) collect data about what you view and buy. It’s sold to others who want to market to you, too.

The next frontier will be the data held by states. Personal stuff from driving records is already sold by many Departments of Motor Vehicles. Marketers also have access to your property-tax assessment or the price of your new house.

Now, they’re pressing for individual wage information, which all states collect on everyone who is employed. So far, four states are providing it: Iowa, Minnesota, Texas and North Carolina. Pennsylvania and California backed off, after a public outcry.

Selling wage information isn’t as bad as it sounds, at least under current rules. The states release it only to verify what you’ve said on a credit application, which could also be checked with your employer.

But the states hold many records that are already public say wills and divorce agreements. Is it OK to publish them on the Internet? Could they be compiled, mixed with your financial data and sold for marketing purposes? Without a good privacy law, the answer is yes.

To reduce the number of telemarketing calls you get, you can add your name to the do-not-call list maintained by the Direct Marketing Association (P.O. Box 9014, Farmingdale, N.Y., 11735). Call (888) 567-8688, to block new offers of pre-screened credit cards. You can also order your bank not to give your credit information to affiliated firms.

But that’s about it. Tell Congress there oughta be a law.

Syndicated columnist Jane Bryant Quinn can be reached in care of the Washington Post Writers Group, 1150 15th St., Washington D.C. 20071-9200.