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.

Weller-McIntosh would permit married couples to file their returns either singly, as if they were unrelated individuals, or jointly -- whichever results in the lower tax burden. The practical effect would be to give a tax cut to two-income couples, with most of the relief going to those with fairly high incomes. In short, Weller-McIntosh would replace the marriage penalty with a new "homemaker penalty," penalizing millions of at-home parents by shifting a greater share of the tax burden onto them. The proposal would also encourage millions of couples, in effect, to deny their marital partnership each April 15, seeking tax treatment as individuals rather than as couples.

The measure's advocates insist that it will strengthen marriage. Actually, just as in Sweden, the predictable results of introducing "marriage neutrality" as a guiding principle of federal taxation are reduced incentives to marry, reduced incentives to bear children, heightened incentives for the parents of young children to enter the paid labor force, and discouragement of all non-market and home-centered labor.

What Congress has forgotten is that two economies always coexist: the market economy, where exchanges take place primarily through money and where competition and effciency drive decisions; and the home economy, where exchanges take place through the altruistic sharing of goods and services among family members, normally independent of cash calculations. It is precisely the home economy -- acts of unpaid production ranging from parental child care and nursing of the sick and the elderly to gardening, home carpentry, and food preparation -- that is the organizing principle of family life and the basis of civil society.

Every marriage creates a new home economy. These little economies are largely undetected in our measurement of the gross national product, just as they are usually beyond the reach of tax collectors. But they are vitally important. If they thrive, the wellbeing of children and of society as a whole improves. Despite its having arisen under the guise of ending the marriage penalty, the current push to weaken the recognition of marriage in the federal tax code -- to move toward taxing all persons as individuals, regardless of marital status -- will do little to strengthen marriage and much to undermine it.

The United States once had a pro-family tax code. It was crafted in the 1940s and lasted into the 1960s. From the introduction of the modern income tax in 1913 until 1943, the federal record on taxes was fairly dismal. The federal income tax largely ignored marriage in favor of efficiency of collection and progressivity of rates, achieved primarily by designating the individual as the main taxable unit. Perhaps not coincidentally, family trends were sharply negative during this period: The marriage rate tumbled, the divorce rate climbed, and the birth rate dropped by a third.

One catalyst for change was a 1930 Supreme Court decision, Poe v. Seaborn, holding that in community-property states (where by law husbands and wives are allocated equal shares of family assets, regardless of the assets" origins), married couples must be permitted to share or "split" their income for purposes of taxation. This change allowed married couples to file joint returns in which the marriage was treated as an equal partnership, with each spouse holding a claim to exactly half of the couple's total income, and with tax brackets for joint returns twice as wide as for singles. Within progressive rates, this measure provided a substantial economic benefit to marriage. (In those rare cases in which husbands and wives earned the same amount, the effect was nil.)

During the 1930s, the practice of income splitting spread, as state legislators found themselves able, by adopting community-property provisions, to provide their constituents with a pro-marriage cut in their federal taxes. To end this stampede, the House Ways and Means Committee proposed in 1941 to eliminate the joint return, so that married couples would pay the same tax on their consolidated income as they would have paid as two individuals -- a reform idea very similar in spirit to that of the Weller-McIntosh single- filing proposal. However, the proposal was beaten back in the House as "a tax on morality" and as "an incentive to divorce."

Instead, the Tax Reform Act of 1944 created for the first time a uniform tax exemption of $ 500 per person, granted only to household members related by "blood, marriage, or adoption." In 1948, the Republican Congress, overriding President Harry Truman's veto, passed a second Reform Act, raising the personal exemption to $ 600 and extending income splitting for married couples to all 48 states.

For the next 15 years or so, these "Principles of '48" had a powerful effect. This period was the only time in American history since 1840 when three things happened at once: The first-marriage rate rose, the divorce rate dropped, and the within-wedlock birth rate climbed. Again, these correlations between tax trends and family trends are almost certainly not coincidental. For example, the economist Leslie Whittington, using a sophisticated econometric analysis, has shown a "robust" relationship between the real value of the personal exemption and fertility: A 1 percent increase in the exemption's value coincided with a remarkable 1 percent increase in births. Researchers such as the sociologists Janet and Larry Hunt have also shown how the tax principles operating in this period directly strengthened the commitment of household members to home production, parental care of children, and civic activism. The legislators, it seemed, had finally gotten it right.

But they couldn't leave it alone. As part of the 1963 tax cut, instead of adjusting the personal exemption for inflation, Congress introduced the " minimum standard deduction," which carried its own modest marriage penalty. In 1969, responding to complaints that unmarried Americans were overtaxed and that the tax code was too pro-natalist, Congress took the damaging step of eliminating the ability of married couples to split their incomes. Among other things, this change created another and even larger marriage penalty -- the one that policymakers are fretting about today. Finally, in the early 1970s, Congress crafted the Dependent Care Tax Credit, giving tax relief of up to $ 800 (now $ 1,440) to employed parents who put their children in commercial child care, thus implicitly assaulting the previously untouched home economy. Some tax theorists justified the new day-care credit as an indirect tax on the "imputed" income produced by at-home parents.

In the late 1960s, the United States began to experience a precipitous decline in marital fertility, a sharp drop in the rates of first marriage, and a surge in divorce. In essence, these trends are still with us. Obviously, federal tax policy has not been the only cause of the weakening of marriage over the past 30 years. But just as obviously, the steady de-emphasis of marriage and home in the tax code has made things worse.

Instead of strolling further down this path, Congress should change course now. And the direction it should take is obvious: To end the marriage penalty, Congress should reject the Weller-McIntosh individual-filing proposal and restore the right of married couples to split their incomes. A bill to do just that has been proposed in the Senate by Republican Connie Mack of Florida and others. Income splitting is the only pro-marriage way to end the marriage penalty. The further individualization of the tax code would be worse than doing nothing.

Does a policy of supporting marriage in the tax code smack of social engineering? In a sense, yes. We see no need to apologize for this. Marriage is more than a special interest: It is our primary social institution and a vital public good. Protecting it in the tax code ought to be a matter of common sense, not controversy.

In a larger sense, however, encouraging marriage is the opposite of social engineering. A certain type of individualism -- the person stripped of family context -- has always been a guiding principle of big-government ideologies. As the Swedish experience shows, "marriage neutrality" in the tax code has become a cornerstone of the post-marriage welfare state, with its heavy emphasis on government-sponsored social engineering. In contrast, protecting family bonds even while collecting taxes is a goal whose importance ought to be clear to anyone who favors democratic civil society and limited government.

For this reason, we should judge all tax-reform proposals now before Congress according to four basic family-support criteria. First, rather than hold up marriage neutrality as the ideal, tax policy should explicitly recognize and seek to protect marriage as a social institution. The main way for the tax code to safeguard marriage is to treat the married-couple household as a single unit of taxation. Second, tax policy should not create disincentives for within-wedlock childbearing or incentives for unwed childbearing or divorce. Third, tax policy should support the rearing of children through generous and universal per capita deductions, exemptions, and credits. And finally, tax policy should not create disincentives for parental care of children or for other unpaid labor in the home or community.

With these criteria in mind, take a case in point, the Dependent Care Tax Credit. Earlier this month, President Clinton proposed a sharp increase in the value of this credit, which was originally conceived as a way to tax indirectly the unpaid labor of at-home parents and is available only to parents who use commercial child care. The president's proposal to make a bad program bigger is utterly irresponsible, a plain assault on parents who want to spend more time with their children. Congress should either eliminate this tax credit or make it fixed and universal -- say, $ 700 per preschool child, regardless of whether the child receives commercial care.

In its handling of the marriage penalty and of measures like the Dependent Care Tax Credit, Congress has a chance to reverse the 30-year practice in the federal tax code of marginalizing marriage. With the approach of the first federal budget surplus in a generation, and exactly half a century after the now-forgotten but absolutely sound Principles of "48, Congress has an important opportunity to get it right. ,

Allan Carlson is president of the Howard Center for Family, Religion, & Society in Rockford, Ill. David Blankenhorn is president of the Institute for American Values in New York.

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