The Magazine


Feb 9, 1998, Vol. 3, No. 21 • By ALLAN CARLSON and DAVID BLANKENHORN
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With the best of intentions, some Republicans are pushing to incorporate into the U.S. tax code the crowning achievement of Swedish social radicalism: the idea that the individual, not the family, is society's basic unit of taxation.

This convergence is unfortunate -- but not entirely surprising. Over the past three decades, both here and abroad, policymakers have increasingly abandoned family-centered taxation in favor of individual taxation. In Sweden, the change came in 1971, when the Socialist government scrapped the tax system that had treated married couples as tax-paying units, in which husbands and wives essentially shared their income equally for purposes of taxation. The results of abandoning this marriage-friendly tax code were to raise the relative tax burden on one-income couples, cut taxes for two-career couples, and reduce the economic advantages of marriage. Indeed, the Swedish radical Annika Baude has described this individualization of the Swedish tax code as the turning point in the left-wing campaign to dislodge marriage as a meaningful institution in Swedish life (a campaign that has been startlingly successful: More than half of all Swedish children are born outside of marriage).

Individualizing the tax code -- adopting the principle of "neutrality" toward (i.e., disregard of) marriage -- has also been a frequently stated goal of the American Left. For example, Myra Strober of Stanford argued a decade ago in Feminism, Children, and the New Families, "In keeping with the notion that adult men and women are independent economic entities, we favor an income tax system such as the one in Sweden, where all persons are taxed as individuals, regardless of their marital status."

This position has now become conventional wisdom. In our current tax debate, it is endorsed at least as strongly on the right as on the left and is less a partisan argument than a shared (and largely unexamined) underlying assumption. Consider last year's influential Congressional Budget office report "For Better or Worse: Marriage and the Federal Tax Code." This study has largely defined the terms of debate on how to purge from the tax code the "marriage penalty," the financial loss two people incur when, as a result of filing a joint income-tax return, they are pushed into a higher tax bracket, causing them to pay more as a couple than they would have if they had been taxed as individuals.

The CBO study focuses on one question: Does getting married make a couple worse off or better off, visa-vis the federal income tax, than they were as unrelated individuals? Because the study assumes that individual filing, or what the report calls "marriage neutrality," is the standard of fairness, the CBO concludes that the tax code now divides married couples into two categories: those receiving a marriage "bonus" (about half of all couples) and those receiving a marriage "penalty" (about 40 percent of all couples). The typical "bonus" beneficiary is a one-earner couple, while the typical " penalty" victim is a two-earner couple. The policy implication of this analysis is clear: Cut taxes for two-earner couples until the "penalty" disappears.

Yet this way of framing the problem makes it impossible to understand the deeper issues at stake: Should the tax code recognize the institution of marriage -- or should it in effect recognize only individuals? Does getting married alter the economic status and decision-making of the spouses? If so, how should the tax code accommodate the change? For purposes of taxation, does a married couple's income belong equally to both spouses, or only to the spouse who earns it in the paid labor force?

These are the core questions. They concern nothing less than what we think marriage is. The CBO, however, answers all of them before they can be asked by adopting an individualistic bias as the study's guiding premise. Ironically, then, a report examining the marriage penalty for two-earner couples -- a penalty, by the way, that virtually everyone, including us, would like to eliminate -- has increased the chances that "pro-marriage" tax reform in 1998 will actually weaken marriage as a social institution.

To see why, consider the popular Marriage Tax Elimination Act, introduced in the House of Representatives by Republicans Jerry Weller of Illinois and David Mcintosh of Indiana and built on the same premise of radical individualism. Weller-McIntosh is supported by over 200 members of the House, including the Republican leadership, as well as by many other political luminaries, including, most recently, Republican presidential candidate Steve Forbes.