Taxing Family Work: Aid for Affluent Husband Care

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. …