Taxing polygamy.

• Author: Brunson, Samuel D.
• Position: Introduction through IV. Tax Discrimination and Fairness, p. 113-138

ABSTRACT

The tax law treats married and unmarried taxpayers differently in several respects. Married persons, for example, can file and pay their taxes as a unified taxpayer, with rates that are different than those that apply to unmarried taxpayers. This different treatment of married persons has elicited criticism over the years. Some of the more salient criticisms include that married persons do not necessarily function as an economic unit, that joint filing discourages women from working, and that the various exclusions from the joint filing regime--including gay couples--is unfair.

This Article looks at joint filing through the lens of polygamy. Polygamy stretches joint filing beyond what it can handle: while the current tax rates could accommodate same-sex couples without any substantive changes, applying the current married-filing-jointly tax brackets to polygamous taxpayers would have absurd--and often unjust--results. Polygamous marriage is not only quantitatively different than dyadic marriage--it is qualitatively different. These quantitative and qualitative differences render traditional joint filing an untenable fit. Ultimately, I conclude that changing from a joint filing system to a mandatory individual filing system that recognizes marriage for certain purposes would be the fairest and most administrable way to treat marriage. Because most commentators think, however, that eliminating joint filing will not happen in the foreseeable future, I also provide a second-best solution that would fit within the confines of the current joint filing regime.

TABLE OF CONTENTS I. INTRODUCTION II. TAXING MARRIAGE A. Prelude to the Joint Return B. Problems With Joint Filing III. NON-TRADITIONAL FAMILIES AND THE FUTURE OF THE JOINT RETURN A. Non-Traditional Dyadic Taxpayers B. Polygamous Taxpayers IV. TAX DISCRIMINATION AND FAIRNESS A. DO AAA and Same-Sex Marriage B. Polygamists and Tax Evasion V. FILING SOLUTIONS A. Refuse to Recognize Polygamous Marriage B. Treat the Entire Polygamous Family as an Economic Unit.. C. Index Tax Brackets to Family Size D. Balkanized Filing E. Mandatory Individual Filing VI. CONCLUSION I. INTRODUCTION

Overwhelmingly, Americans find polygamy distasteful, if not immoral. (1) For some, such distaste seems almost visceral, a reaction to what they consider a barbaric and backward practice. (2) Others point to concrete harms polygamy allegedly causes. For example, polygamy's critics frequently highlight the sexual exploitation of underage girls and the general inequality and abuse women face in polygamous communities to underscore polygamy's immorality. (3) But critics do not end their list of polygamy's evils with the abuse of women and girls. As they dig deeper into the litany of evils perpetrated by polygamists, critics almost invariably mention a problem far less intuitive: tax evasion. (4)

Still, aside from a glancing mention of tax evasion, no scholarship has analyzed the tax environment polygamists face. Instead, nearly all academic discussion of polygamy focuses either on whether to decriminalize polygamy (5) or whether polygamists enjoy any level of constitutional protection. (6) Scholars have generally ignored analyzing the operation of other generally applicable laws to polygamous families. (7) Recently, however, Professor Adrienne Davis introduced a "different approach" to polygamy scholarship. (8) She proposes moving beyond questions of decriminalization and constitutional protections. In doing this, she challenges scholars to explore second-generation questions, including "whether and how polygamy might be effectively recognized and regulated ... " (9) Professor Davis goes on to propose that the default rules of polygamy could mimic commercial partnership law. (10)

In the spirit of Professor Davis's second-generation polygamy paradigm, this Article represents the first attempt to address polygamous families and the federal income tax. (11) Evaluating the appropriate tax treatment of polygamous families provides a necessary foundation for all scholars of polygamy who are interested in how polygamy in America should look. The legalization and regulation of polygamy remain relatively impractical unless we know how polygamists will file and pay their taxes; polygamists, like most Americans, must earn income. Furthermore, like most Americans, they will need to calculate and pay taxes on that income. The tax law, however, has no mechanism for dealing with polygamous taxpayers. Though changing the focus of the discussion from whether polygamy oppresses women to how polygamous families can file their taxes seems a descent from the sublime to the banal, paying federal income tax represents one of the few experiences common to nearly all Americans, irrespective of marital status. The tax system, then, represents one legal regime polygamists would need to navigate.

Much of the scholarship that addresses polygamy also addresses samesex marriage. (12) Both opponents and proponents of polygamy point to growing legal and societal acceptance of homosexuality as paving the way toward legalized polygamy. (13) Same-sex marriage scholarship, moreover, has addressed issues of filing and paying taxes. (14) However, in this area, as in others, a polygamous marriage is not merely dyadic marriage plus. (15) Although some questions remain about who must file as married (16) after the Supreme Court's decision that Section 3 of the Defense of Marriage Act ("DOMA") is unconstitutional, (17) the tax law will treat opposite-sex and recognized same-sex marriages identically. Although scholars have debated whether marriage should affect tax filing and tax liability, (18) once there are special rules applicable to married couples, those rules can apply in the same manner to all dyadic marriages.

Polygamous marriage, though, differs from dyadic marriage both quantitatively and qualitatively. Taxing a polygamous family under the current regime would not provide for horizontal equity between dyadic and polygamous households. Instead, the current regime would in fact exacerbate marriage penalties and marriage bonuses. (19) Polygamy represents the cliched square peg to joint filing's round hole--to force polygamy into the current joint filing regime will necessarily damage polygamous families, the joint filing system, or both. Ultimately, this Article finds that polygamy constitutes the strongest justification to date for switching from joint filing to mandatory individual filing.

This Article proceeds in four parts. Part II discusses the provenance of joint tax filing in the United States, as well as the current criticisms and defenses of joint filing. Part III examines tax issues facing nontraditional dyadic families, including domestic partnerships, civil unions, same-sex marriages, and contrast those with the issues facing polygamous taxpayers. Part IV discusses how polygamy implicates the fairness of current tax law. Finally, Part V explores a series of approaches that the tax law could implement to accommodate polygamous taxpayers. It discusses the pros and cons of these several approaches, and gives two proposals that would make the tax law's treatment of dyadic and polygamous taxpayers more equitable. (20)

2. TAXING MARRIAGE

   Implementing a fair and progressive tax regime is complicated. Trying to maintain that fairness and progressivity with respect to married couples increases that complexity exponentially. (21) Once it acknowledges marriage, a tax regime must determine whether to treat the married couple as a taxpaying unit or whether each individual spouse must pay taxes separately. A fair tax system should include marriage neutrality, income pooling, and progressive tax rates. (22) Unfortunately, as Professor Boris Bittker famously illustrated, these principles conflict with each other, leaving Congress with the weighty task of choosing among these goals in designing a marriage tax. (23)

   1. Prelude to the Joint Return

      Although the federal income tax currently treats married couples as an appropriate taxpaying unit, the federal income tax has throughout its history alternated between treating individuals and married couples as that unit. (24) When Congress originally enacted the federal income tax, it chose the individual as the appropriate taxable unit, (25) imposing tax on the "net income of every individual." (26) In spite of the plain language of the statute, the Bureau of Internal Revenue initially "took the position that the 1913 income tax ... taxed married couples as units." (27) The next year, though, the Treasury Department reversed itself, requiring husbands and...