Taxing the family work: aid for affluent husband care.

• Author: McCluskey, Martha T.

ABSTRACT

The income of the classic breadwinner married to a homemaker receives a tax advantage under federal income tax law. The conventional wisdom holds that any resulting inequities to unmarried persons or dual-earning marriages cannot be corrected without producing similarly problematic inequities. This Article challenges that dilemma by analyzing the inequity of the marital tax system from a new perspective. This Article argues that the perceived "bonus" for breadwinner-homemaker marriages is best understood as an implicit policy of "aid for affluent husband care." Recent tax reforms (up for renewal in 2010) that partly reduced the "marriage penalty "for some dual-earning couples are inequitable not simply because these reforms exclude upper-income and lower-income marriages while penalizing single persons. More fundamentally, this Article shows how these tax reforms increase a regressive system of support for the family caretaking labor on which income earning depends. This Article aims to show how a change to individualized, more progressive rates could more equitably treat income earning and informal caretaking labor regardless of family status.

INTRODUCTION

How should family status affect income taxes? In 2001, Congress began a series of changes to federal income tax law aimed at reducing the so-called "marriage penalty" on dual earning middle class income tax payers. (1) These marriage tax reforms, set to expire in 2010 under a sunset provision, (2) enjoy continuing approval across the political spectrum. (3) The reforms reduced taxes for many dual-earning married couples by increasing what has been called the "marriage bonus." (4) That bonus, however, does not go to all married taxpayers. Instead, it particularly directs tax benefits toward relatively affluent breadwinners married to spouses with relatively little or no market earnings. That is, the tax system privileges the traditional--and traditionally white, male, and heterosexual--family provider married to a homemaker. (5) By analyzing this recently enhanced marital tax preference as "aid for affluent husband care," this Article reveals problems with the recent marriage tax reforms and the longstanding marital tax system. Instead, the tax system should be changed to support caretaking for workers regardless of family status.

Tax scholarship and popular commentary have extensively criticized the inequities resulting from past and present marriage-linked tax penalties (6) and bonuses. (7) These inequities have been heightened as demographic change has eroded the tax-favored breadwinner-homemaker marriage both as an ideal and as an empirical reality. (8) Why has such a seemingly outdated and inequitable marriage-based tax scheme not only endured but also gained so much political ground while alternative policies remain off the table of serious examination and debate?

This Article argues that a different analytical lens would help clarify the persisting problems of principle and politics grounding current marriage tax policy. In the classic framework, family taxation poses an inescapable dilemma between "marriage neutrality" and "married couples equality." (9) On the surface, both of these principles seem to be reasonable measures of equitable taxation. "Marriage neutrality" holds that individuals with the same income should be taxed the same regardless of marital status, while "married couples' equality" holds that married couples with the same joint income should be taxed the same regardless of individual income distribution within the marriage. From this perspective, the current system of marriage-linked bonuses and penalties represents one of several historic policy attempts to weigh these two seemingly competing goals. (10) to Major change in the family tax system appears neither intellectually nor practically compelling in the face of what conventional tax wisdom treats as an insolvable conflict among equities.

But this apparent dilemma of equities dissolves when one more precisely analyzes how homemaking wives' unpaid caretaking labor provides "affluent husband care." Tax scholarship has discussed the problem of failing to count the traditional homemaker's unpaid labor as income for tax purposes. (11) This Article shifts that discussion to examine informal domestic labor as a gain to the traditional breadwinning husband. This change in focus shows that the "married couples' equality" principle is flawed because it fails to give normal tax recognition to the market income of primary breadwinning husbands, not because it fails to give special tax recognition to informal homemaking.

Discussions of family tax policy tend to be obscured by the assumption that homemaking wives' unpaid caretaking goes mainly to dependents. Instead, this Article considers how tax policy addresses family caretaking for breadwinning husbands, that is, those typically identified as quintessentially independent providers for others. (12) This shift in flame reveals that the affluent breadwinner-homemaker family form often held out as the model of self-sufficiency instead relies on special government tax support amounting to over thirty billion dollars a year. (13)

Furthermore, that dollar amount exceeds the level of government spending on the classic former family welfare program, Aid to Families with Dependent Children (AFDC), (14) suggesting a policy preference for "aid for affluent husband care." AFDC's support for low-income single parent families was replaced in 1996 with a new system centered on the goal of moving impoverished single mothers from informal family caretaking to formal market work. (15) That welfare policy change narrowing public support for unpaid caretaking in low-income families contrasts with the recent expansion of tax support for unpaid caretaking by middle and upper income married homemakers.

Though this Article joins others criticizing the unfairness of this tax privilege for breadwinners with homemaking spouses, it takes this criticism in a new direction by advocating further expansion, rather than elimination, of tax aid for family caretaking of breadwinners. All income earners, not just those with substantial income and not just those married to non earners or low-earners, deserve more substantial tax support for the caretaking costs related to market labor. Though the current system of "aid to affluent husbands" is highly inequitable, it correctly recognizes that producing and maintaining successful market earnings typically requires substantial resources, both monetary and non-monetary. Family tax policy does not require a choice between favoring wives' (or others') formal market earnings over informal family caretaking (or unpaid leisure). Instead, replacing the current system of "aid for affluent husband care" with equitable tax support for breadwinner care could lead to more equitable and effective support for informal family caretakers as well.

Fair tax support for breadwinner care could be achieved through a policy change to individual taxation of work income combined with increased progressivity. By identifying the goal as fair tax support for all breadwinners, in place of "aid to affluent husbands," this Article aims to further clarify and develop existing arguments for an individualized tax system.

The political resilience of the tax preference for relatively affluent breadwinner-homemaker marriages is partly a problem of an ideological frame that, intentionally or not, limits imagination about alternative schemes by obscuring the contested values and politics on which the marital tax scheme depends. By identifying this tax break as "aid for affluent husband care," this Article links the current inequities to specific political interests and social values, not just formal tax principles or the technical complexities of adapting the tax system to social Change. Furthermore, this framework turns the moral and political debate away from the deeply divisive questions of whether to favor "marriage" at the expense of single individuals, to support "working wives" at the expense of full-time homemakers or to support tax relief for dual-earning professional married couples at the expense of struggling "traditional" breadwinner-homemaker families with modest incomes. Instead, by redefining the reform goal as more equitable aid for breadwinner care in general, this Article shows how the majority of workers and family caretakers would benefit from rejecting the current marriage tax scheme.

Finally, by identifying the family tax system as a problem of support for "affluent husband care," this Article aims to clarify broader issues of tax policy and ideology. The recent marital tax reforms are perhaps most significant not for their increased subsidy to higher-earning "husbands," but for their political role in leveraging upper-middle class support for much more lavish tax cuts directed at the very rich. (16) Underlying the marriage tax debate is the bigger question of how to treat the costs of producing monetary gains. Who deserves to command public and private support for their economic production, and whose economic production should be directed toward serving others' gains?

The history and continuing operation of the family tax system, viewed through the lens of "aid for affluent husband care," shows how tax policy has singled out the market work of the paradigmatic affluent white married man for special support. Taken in context of the recent upper-class tax cuts, the recent marriage tax reforms may represent a shift toward an ideal privileging the wealthiest as the quintessential producers of societal gain, and therefore those most deserving of public support. (17) By replacing the current marriage tax system with a fairer system of tax support for the costs of work, we could take a step toward a different vision. Reforming tax "aid for affluent husband care" could help advance an idea of economic well-being and...