Adopting the family taxable unit

University of Cincinnati Law Review

Volumn 76, Issue 1, 2007, Pages 55-103

  Hoffer, Stephanie ^a  

^a NORTHWESTERN UNIVERSITY   (United States)

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EID: 38949084219     PISSN: 00096881     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (348)

1. BEN J. WATTENBERG, FEWER: HOW THE NEW DEMOGRAPHY OF DEPOPULATION WILL SHAPE OUR FUTURE 1 *2004).
2. LAURENCE J. KOTLIKOFF & SCOTT BURNS, THE COMING GENERATIONAL STORM: WHAT YOU NEED TO KNOW ABOUT AMERICA'S ECONOMIC FUTURE 3 (2004).
3. WATTENBERG, supra note 1, at 127. Total fertility rate, roughly speaking, is the number of children per woman in a particular country. Technically, it is defined as the average number of children that a birth cohort of women would having during their lifetimes if they survived their childbearing years and had children at the age-specific birthrates applicable to the period in question.
4. See U.N. DEP'T OF ECON. AND SOC. AFFAIRS, POPULATION DIV., WORLD POPULATION PROSPECTS: THE 2004 REVISION, VOL. III, at 34, U.N. Doc ST/ESA/SER.A/246 (2006), available at http://www.un.org/esa/population/publications/WPP2004/WPP2004_Vol3_Final/ WPP2004_Analytical_Report.pdf [hereinafter UNITED NATIONS].
5. WATTENBERG, supra note 1, at 112.
6. PHILLIP LONGMAN, EMPTY CRADLE: HOW FALLING BIRTHRATES THREATEN WORLD PROSPERITY AND WHAT TO DO ABOUT IT 4 (2004).
7. WATTENBERG, supra note 1, at 116 (suggesting that pay-as-you go retirement benefits will result in economic disarray in countries facing depopulation).
8. Id.
9. Id.
10. Technology might surprise us. It ranges from the cheerful to the macabre. For instance, robots like Honda's Asimo might stand in for workers. Or, as Stanley Kurtz has laughably suggested, a "eugenic regime" of crazed scientists might "spell the definitive end of the nuclear family" through creation of "artificial wombs."
11. See Stanley Kurtz, Demographics and the Culture War, 129 POL'Y REV. 33, 44-45, (2005), available at http://www.hoover.org/publications/policyreview/3431156.html.
12. The United States: 300 Million and Growing, WALL ST. J., Oct. 21, 2006, at A7.
13. See Marcus Walker, Population Control: In Estonia, Paying Women to Have Babies is Paying Off, WALL ST. J., Oct. 20, 2006,
14. at Al. See also June Kronholz, Immigration's Latest Debate: Is U.S. Big Enough?, WALL ST. J., July 11, 2006, at A5.
15. To put the question into perspective, consider Pittsburgh, a traditional blue-collar city. According to the Bureau of Labor and Statistics, it will lose a full tenth of its labor force over the next seven years. Eduardo Porter, Coming Soon: The Vanishing Work Force, N.Y. TIMES, Aug. 29, 2004, § 3, at 1, available at 2004 WLNR 5511490.
16. Half of its electric workers and at least 6,500 of its nurses will reach retirement age over that period, leaving the city with a shortage of qualified laborers, but nothing so dramatic as the shortage that is expected in Japan. Id.
17. See Stephen Moore, Supply Side: 300,000,000, WALL ST. J., Oct. 3, 2006, at A26;
18. The United States: 300 Million and Growing, supra note 10.
19. LONGMAN, supra note 5, at 16.
20. See also BRADY E. HAMILTON ET AL., U.S. DEP'T OF HEALTH & HUMAN SERVS., BIRTHS: PRELIMINARY DATA FOR 2003 2 tbl. A (2004), available at http://www.cdc.gov/nchs/data/nvsr/nvsr53/ nvsr53_09.pdf (showing that in 2003, only mothers of Hispanic ethnicity had a TFR in excess of the replacement rate, while Native American women had a TFR of 1.72, Caucasian women 1.86, Asian women 1.87, and Black women 1.87).
21. HERBERT S. KLEIN, A POPULATION HISTORY OF THE UNITED STATES 175 (2004).
22. WATTENBERG, supra note 1, at 121. This is a financial boon, because the average immigrant contributes $80,000 more in taxes than she receives in government services over the course of a lifetime.
23. Id.
24. at 192. See also The United States: 300 Million and Growing, supra note 10 (stating that "Jeffrey Passell, a demographer from the Pew Hispanic Center estimates that immigrants and their U.S.-born offspring made up 55% of the last 100 million people in the U.S.");
25. Kronholz, supra note 11 (stating that immigration is expected to account for almost all public school growth over the next decade and that the United States fertility rate "has been falling for decades and now is less than two. But Hispanics, who account for more than half of all immigrants and 80% of illegal immigrants, average almost three babies per woman. As a result, 20% of children under age five in the U.S. are Hispanic."
26. Id.
27. KLEIN, supra note 15, at 236;
28. LONGMAN, supra note 5, at 16. For more information on the decline in birthrates during the Great Depression, and the positive effect of subsequent economic stability,
29. see Price V. Fishback, Michael R. Haines & Shawn Kantor, Births, Deaths, and New Deal Relief During the Great Depression (Nat'l Bureau of Econ. Research, Working Paper No. 11246, 2005), available at http://www.nber.org/papers/w11246.
30. WATTENBERG, supra note 1, at 65.
31. Id. at 74-75.
32. Id. at 155.
33. Id.
34. Id. at 6.
35. WATTENBERG, supra note 1, at 115.
36. KOTLIKOFF & BURNS, supra note 2, at 1.
37. Id.
38. Id.
39. at 6. This phenomenon is by no means confined to the United States. According to the United Nations, the number of people over the age of sixty-five will triple from 476 million in 2005 to almost 1.5 billion in 2005. UNITED NATIONS, supra note 3, at 27.
40. Americans' Life Expectancy Reaches a Record 77.6 Years, ST. LOUIS POST-DISPATCH, Mar. 1, 2005, at A05, available at 2005 WLNR 3152041. Scientists predict that it may soon be common for people to live over 100 years. The National Journal notes that: [t]he race for the three-figure obit has already begun. This spring, a high-profile research team called LifeQuest Expedition, partly sponsored by the U.S. government, will travel to "longevity hot spots" around the world-places like Okinawa, Japan, and the Italian island of Sardinia, where unusually large numbers of people live past 100. The LifeQuest team will collect data about how these people become such "successful agers," and will report back to the American public.
41. William Powers, The Immortality Race, 37 NAT. J. 7 (2005), available at http://www.theatlantic.com/doc/prem/200502u/ nj_powers_2005-02-15.
42. LONGMAN, supra note 5, at 38.
43. Id.
44. KOTLIKOFF & BURNS, supra note 2, at 4-5.
45. Id.
46. Id. at 6. This paper does not call into question the expenses themselves-over two-thirds of older Americans get at least 50% of their income from Social Security and the bulk of their health needs from Medicare.
47. Id. at 203. Rather, it focuses on a family-friendly measure that could mitigate the difficulty of meeting these needs by, if stated crassly, contributing to an increase in the number of available taxpayers.
48. Id. at 8;
49. LONGMAN, supra note 5, at 18. In fact, Kotlikoff and Burns have gone so far as to say that "unless we act soon, the Greatest Generation will be the last to leave its children and grandchildren a better country."
50. KOTLIKOFF & BURNS, supra note 2, at 224.
51. See also UNITED NATIONS, supra note 3, at 26 (noting that changes in population age may translate into economic changes).
52. KOTLIKOFF & BURNS, supra note 2, at 190.
53. Daniel N. Shaviro, Reckless Disregard: The Bush Administration's Policy of Cutting Taxes in the Face of an Enormous Fiscal Gap, 45 B.C. L. REV. 1285, 1298 (2004).
54. Id. at 1302 (noting that the fiscal gap "appears to be growth-proof because various expenditure programs, no less than taxes, are pegged to [gross domestic product] over the long run").
55. Id.
56. KOTLIKOFF & BURNS, supra note 2, at 65 (citing JAGADEESH GOKHALE & KENT SMETTERS, FISCAL AND GENERATIONAL IMBALANCES: NEW BUDGET MEASURES FOR NEW BUDGET PRIORITIES (2003), available at http://www.clevelandfed.org/Research/PolicyDis/no5dec03.pdf).
57. See also Jagadeesh Gokhale & Kent Smetters, Measuring Social Security's Financial Problems (Nat'l Bureau of Econ. Research, Working Paper No. 11060, 2005), available at http://www.nber.org/papers/ w11060.
58. KOTLIKOFF & BURNS, supra note 2, at 65.
59. Id. at 6.
60. LONGMAN, supra note 5, at 4.
61. KOTLIKOFF & BURNS, supra note 2, at 1.
62. Id. at 190.
63. LONGMAN, supra note 5, at 127-128.
64. See generally KOTLIKOFF & BURNS, supra note 2;
65. LONGMAN, supra note 5;
66. WATTENBERG, supra note 1.
67. Id. at 42-71.
68. WATTENBERG, supra note 1, at 97-98.
69. Id. at 94.
70. Id. at 102.
71. LONGMAN, supra note 5, at 32.
72. See generally LONGMAN, supra note 5;
73. WATTENBERG, supra note 1;
74. KOTLIKOFF & BURNS, supra note 2.
75. LONGMAN, supra note 5, at 17.
76. Id. at 159. According to Longman, this trend caused Theodore Roosevelt to lament the decline in fertility of "'old New England stock.'"
77. Id. Longman writes: He attributed the trend partly to the "highly welcome emancipation of woman" but went on to explain that "this new freedom has been twisted into wrong where it has been taken to mean a relief from all those duties and obligations which, though burdensome in the extreme, women cannot expect to escape."
78. Id. Fortunately, a more enlightened view prevails today.
79. RUTH WESTON ET AL., AUSTRALIAN INST. OF FAMILY STUDIES, "IT'S NOT FOR LACK OF WANTING KIDS": A REPORT ON THE FERTILITY DECISION MAKING PROJECT 61 (2004), available at http://www.aifs.gov.au/institute/pubs/resreport11/aifsreport11.pdf (finding that women's expected family size varies significantly with employment status).
80. See also Claudia Goldin, Career and Family: College Women Look to the Past (Nat'l Bureau of Econ. Research, Working Paper No. 5188, 1995), available at http://www.nber.org/papers/w5188.
81. See WESTON, supra note 54, at 76 (noting that although the correlation between education and preferred family size is not statistically significant, more highly educated individuals are, in fact, less likely to be parents).
82. Id. at 92.
83. WATTENBERG, supra note 1, at 96.
84. KLEIN, supra note 15, at 218.
85. Id.
86. LONGMAN, supra note 5, at 85. For some women, the choice to have a smaller family may not be a conscious one. One study reports that 58% of women overestimate the number of their childbearing years by five to ten years of age.
87. Id. at 83. Nearly 40% of the women surveyed believed that their fertility would not decline until age forty, while recent studies show that it drops as much as 50% by age thirty.
88. Id. As a result, women who delay childbirth as a result of economic or on-the-job pressure will, of necessity, have fewer children whether they like it or not.
89. Christopher J. Ruhm, How Well Do Parents with Young Children Combine Work and Family Life 4 (Nat'l Bureau of Econ. Research, Working Paper No. 10247, 2004), available at http://www.nber.org/papers/w10247.
90. Id. at 3 (noting that mothers spend nineteen hours per week on housework compared to ten hours spent by fathers);
91. Patricia Wen, Gen X Dad Luxury Vacations, Fast-Track Careers, and Bigger Houses Used to Be a Priority for Family Men, but No Longer. Today's Young Fathers Are Taking Paternity Leaves, Rejecting Overtime, and Rushing Home After Work to Do All the Things Many of Their Own Fathers Didn't, BOSTON GLOBE, Jan. 16, 2005, available at 2005 WLNR 683363 (citing study conducted by Families and Work Institute in New York finding that fathers spend 2.7 hours per workday caring for children while mothers spend 3.3 hours per day).
92. Id. This number represents 19 hours per week of domestic work in addition to 3.3 hours per day of childcare activities.
93. LONGMAN, supra note 5, at 74.
94. Id.
95. WESTON ET AL., supra note 54, at 126.
96. Id.
97. LONGMAN, supra note 5, at 34, 38.
98. Nonetheless, they can be significant, ranging from 5%-30% of a family's disposable income. See Ruhm, supra note 61, at 7.
99. WESTON ET AL., supra note 54, at 151.
100. Id. at 101.
101. Id.
102. Id.
103. KLEIN, supra note 15, at 156.
104. Id.
105. Id.
106. Id. at 175. For instance, families benefited from a strong economy in combination with tax allowances for home ownership and the availability of affordable housing.
107. Id. at 176.
108. Id. at 156.
109. Id.
110. WATTENBERG, SUPRA note 1, at 63.
111. This, of course, assumes that technological advances over the next fifty years will not mitigate any reduction in the labor force. Honda's Asimo robot has already met with seven heads of European state, including German Chancellor Gerhard Schroeder. See Honda Worldwide, The Worlds Most Advanced Humanoid Robot Meets Members of the EU, Jan. 25, 2005, http://world.honda.com/news/ 2005/c050125_c.html.
112. Anne Reinstadler et al., Comparative Study on the Effects of Family Policy in French-Speaking Countries, 1 J. POPULATION & Soc. SECURITY 492, 520 (Supp. 2003), available at http://www.ipss.go.jp/webj-ad/WebJournal.files/population/2003_6/19.Reinstadler. pdf.
113. Stephen Graham, Germany Hopes Bonus Will Finance Baby Boom, STAR-TELEGRAM, Jan. 4, 2007, at A9.
114. Birth Rate Linked to Fear of Losing Job, CANBERRA TIMES, Jan. 29, 2005, available at 2005 WLNR 1211831.
115. LONGMAN, supra note 5, at 145.
116. WATTENBERG, supra note 1, at 123. The fragrances are named "Romancing Singapore Eau de Parfum."
117. Id.
118. Graham, SUPRA note 83.
119. For instance, one recent study noted that employers' family leave provisions in the United States are "suboptimal." See Ruhm, supra note 61, at 8. According to the study, paid parental leave of a certain length would improve women's labor market outcomes and would benefit children.
120. Id. This might, in itself, foster greater fertility. The study also revealed that access to high-quality formal day care improves school readiness in pre-kindergarten children.
121. Id. Knowledge of the benefits of daycare might affect fertility by removing mothers' doubts about working rather than staying at home. Other useful measures might include those that would provide greater access to quality childcare or those that would defray the cost of a child's consumption by providing targeted benefits.
122. Most family-friendly measures could be employed to this end. For instance, Anne Alstott has recommended the creation of "caretaker resource accounts." ANNE ALSTOTT, NO EXIT: WHAT PARENTS OWE THEIR CHILDREN AND WHAT SOCIETY OWES PARENTS 75-78 (2004). The accounts would provide funds for childcare, for the caretaker's education, or for the caretaker's retirement savings.
123. Id. at 78. By making additional resources available for these uses, caretaker accounts would ameliorate the loss of resources and opportunities inherent in the continuous care obligation assumed by caretakers.
124. Id. at 90. In contrast, Donald Tobin has proposed the creation of a "Child Investment Fund" that would make annual payments directly to children.
125. Donald B. Tobin, Investing in Our Children: A Not So Radical Proposal, 73 U. CIN. L. REV. 457, 459 (2004). The stipends would alleviate societal underinvestment in children's human capital, and children would be required to repay them upon maturity.
126. Id. at 457-59. These proposals, and many others, recognize that in the aggregate, children are a net good even though they place financial and other strictures on their caretakers. My proposal is similar in this regard.
127. NADA EISSA & AUSTIN NICHOLS, 2005 AEA/NEA JOINT SESSION ON "SKILLS, POLICY AND LABOR MARKET OUTCOMES ACROSS DEMOGRAPHIC GROUPS," TAX-TRANSFER POLICY AND LABOR MARKET OUTCOMES 1 (2005), available at http://www.urban.org/UploadedPDF/411237_tax_transfer.pdf;
128. Nada Eissa & Jeffrey B. Liebman, Labor Supply Response to the Earned Income Tax Credit, 111 Q. J. ECON. 605, 607 (1996) (noting that the introduction of the EITC correlates to increased labor force participation of single women with children relative to those without).
129. Ruhm, supra note 61, at 2.
130. See Nada Eissa & Hilary Williamson Hoynes, The Earned Income Tax Credit and the Labor Supply of Married Couples 3 (Nat'l Bureau of Econ. Research, Working Paper No. 6856, 1998), available at http://www.nber.org/papers/w6856;
131. Ruhm, supra note 61, at 10.
132. Nada Eissa, Taxation and Labor Supply of Married Women: The Tax Reform Act of 1986 as a Natural Experiment 3 (Nat'l Bureau of Econ. Research, Working Paper No. 5023, 1995), available at http://www.nber.org/papers/ w5023 (attributing the increase to a 36% increase in the after-tax wage of a woman in the top bracket who earned under $30,000 per year).
133. Id. at 6.
134. James Alm & Leslie A. Whittington, Income Taxes and the Marriage Decision, 27 APPLIED ECON. 25, 26 (1995).
135. Id.
136. See James Aim, Stacy Dickert-Conlin & Leslie A. Whittington, Policy Watch: The Marriage Penalty, 13 J. ECON. PERSP. 193, 200 (1999).
137. Hector Chade & Gustavo Ventura, Income Taxation and Marital Decisions, 8 REV. ECON. DYNAMICS 566, 590-91 (2005).
138. Id. at 591.
139. See Marianne P. Bitler, et al., The Impact of Welfare Reform on Living Arrangements (Nat'l Bureau of Econ. Research, Working Paper No. 8784, 2002), available at http://www.nber.org/papers/w8784.
140. Id.
141. See Raquel Fernandez & Alessandra Fogli, Culture: An Empirical Investigation of Beliefs, Work, and Fertility (Nat'l Bureau of Econ. Research, Working Paper No. 11268, 2005), available at http://www.nber.org/papers/w11268;
142. Raquel Fernandez & Alessandra Fogli, Fertility: The Role of Culture and Family Experience (Nat'l Bureau of Econ. Research, Working Paper No. 11569, 2005), available at http://www.nber.org/papers/w11569.
143. It has been suggested that one could look to studies assessing the effect of changes in welfare benefits on fertility. In my opinion, the two situations are not comparable. Recipients of welfare rely upon the payments they receive to pay for subsistence-level consumption. A middle-income family would not face the same consideration. Furthermore, studies of the effect of welfare on fertility have been inconclusive. See Theodore Joyce et al., Welfare Reform and Non-Marital Fertility in the 1990s: Evidence from Birth Records 3-4 (Nat'l Bureau of Econ. Research, Working Paper No. 9406, 2002), available at http://www.nber.org/papers/w9406 (noting that welfare reform has not reduced non-marital fertility and that studies assessing the effect of welfare benefits on fertility have been inconclusive);
144. Melissa S. Kearney, Is There an Effect of Incremental Welfare Benefits on Fertility Behavior? A Look at the Family Cap 3, 6 (Nat'l Bureau of Econ. Research, Working Paper No. 9093, 2002), available at http://www.nber.org/papers/w9093 (noting that implementation of a family benefits cap failed to change the birthrate of women on welfare and stating that welfare fertility studies in the 1970s, 1980s and 1990s produced mixed results).
145. Leslie A. Whittington, James Alm & H. Elizabeth Peters, Fertility and the Personal Exemption: Implicit Pronatalist Policy in the United States, 80 AM. ECON. REV. 545 (1990).
146. Id. at 547.
147. Id. at 552.
148. Id.
149. Reinstadler et al., supra note 82, at 523.
150. Id.
151. Id.
152. Id. at 524.
153. Id.
154. See, e.g., 26 U.S.C.A. §§ 21, 24, 151(c) (West 2006).
155. 26 U.S.C. § 151(c).
156. Id. § 152.
157. Rev. Proc. 2005-70, 2005-2 C.B. 979. The phase-out amounts for 2006 range from $112,875 for married taxpayers filing separately to $225,750 for taxpayers who are married filing jointly.
158. Id.
159. Ayla A. Lari, Sharing Alike: French Family Taxation as a Model for Reform, 37 DUQ. L. REV. 207, 218 (1999). The author notes that "[t]o be the equivalent to the 1948 exemption, the 1984 exemption should have been $5,600; instead it was $1,000."
160. Id.
161. See William M. Gentry & Alison P. Hagy, The Distributional Effects of the Tax Treatment of Child Care Expenses (Nat'l Bureau of Econ. Research, Working Paper No. 5088, 1995), available at http://www.nber.org/ papers/w5088 (noting that the uniform dependent exemption is not tailored to the cost of caring for a young child versus the cost of caring for an older one).
162. 26 U.S.C.A. § 24 (West 2006).
163. Id. § 21(a).
164. Id. § 21(a).
165. Id. § 21(c).
166. Id. § 21(a)(2).
167. Id. § 23.
168. Id. § 129(a).
169. Id. § 129(e)(1), (e)(7).
170. Id. § 35(a).
171. Id. § 104.
172. Id. §§ 105, 106 .
173. Id. § 213.
174. Internal Revenue Serv., Dep't of the Treasury, It's Easier Than Ever To Find Out if You Qualify for EITC, http://www.irs.gov/individuals/article/0id= 96406,00.html (last visited June 16, 2007). Congress originally approved the EITC in 1975 in part to offset the burden of social security taxes and to provide an incentive to work, but its scope has since expanded. Id.
175. Id.
176. Id.
177. Internal Revenue Serv., Dep't of the Treasury, Frequently Asked Questions and Answers: Qualifying Child(ren) Residency Certification Test, http://www.irs.gov/individuals/article/0id= 119267,00.html (last visited June 16, 2007). A qualifying child is one who is the taxpayer's son, daughter, adopted son or daughter, stepson, stepdaughter, brother, sister, stepbrother, stepsister, or a descendent of any of them, and whom the taxpayer cares for as her own child. Id.
178. A qualifying child must be under the age of 19 or must be under the age of 24 and a fulltime student. Id.
179. See 26 U.S.C.A. § 1(b) (West 2006).
180. Id. § 2(b).
181. Id. § 1(b).
182. Id.
183. Id. § 63(b)(2).
184. See INTERNAL REVENUE SERV., DEP'T OF THE TREASURY, U.S. INDIVIDUAL INCOME TAX RETURN, FORM 1040 (2006).
185. See 26 U.S.C.A. § 1 (West 2006);
186. INTERNAL REVENUE SERV., DEP'T OF THE TREASURY, PACKAGE 1040-1, 2006 1040 FORMS AND INSTRUCTIONS 65 (2006).
187. To illustrate, the 2006 liability on taxable income of $50,000 for single filers and married persons filing separately was $9,171. Id.
188. For heads of household it was $8,004, and for joint filers it was $6,774. Id.
189. See 26 U.S.C. § 1.
190. Id.
191. Id.
192. Id.
193. In addition, Victor Thuronyi has suggested that the exclusion of gifts from gross income under § 102 of the Internal Revenue Code can be viewed as an extension of the family taxable unit concept. See Victor Thuronyi, The Concept of Income, 46 TAX L. REV. 45, 75 (1990). Professor Thuronyi's observation illustrates the omnipresence of the family in tax statutes.
194. Marjorie E. Kornhauser, Love, Money, and the IRS: Family, Income-Sharing, and the Joint Income Tax Return, 45 HASTINGS L.J. 63, 97 (1993).
195. Although Professor Kornhauser argues that families do not pool resources, in which case consumption of one family member should not affect another, the data are inconclusive. She states that 70% of all married couples in one survey deposited their earnings "solely in joint accounts." Id. at 86.
196. A second survey, involving law students in committed relationships, revealed that over 55% "kept all wages jointly." Id. Note that these data, which indicate a high level of pooling on their own, do not address instances of partial pooling, which I predict would raise the numbers well above the 70% and 55% figures observed in Professor Kornhauser's surveys. As a result, the argument that family pooling is not supported by empirical data is not well founded, at least as regards basic expenses.
197. Id. at 97.
198. Dakota Fanning excepted, of course.
199. See 26 U.S.C.A. §§ 21, 129 (West 2006).
200. See Nancy C. Staudt, Taxing Housework, 84 GEO. L.J. 1571, 1605 (1996) (noting that §§ 21 and 129 demonstrate Congress's recognition that children interfere with the pursuit of economic independence).
201. See also ALSTOTT, supra note 89, at 21-27 (noting that childrearing is time-consuming and unpredictable work that may result in lost wages, lower career achievement, and lost social security benefits).
202. See Staudt, supra note 152. I say "inadvertently" because the joint filing system clearly discourages labor-force participation by secondary earners in some instances.
203. Id.
204. Id. at 1585-86.
205. As an empirical matter, the level of child care credits that a family expects to receive is positively correlated with a mother's return to work within three months of her first child's birth. See Jacob Alex Klerman & Arleen Leibowitz, Child Care and Women's Return to Work after Childbirth, 80 AM. ECON. REV. 284,287 (1990).
206. See Anne L. Alstott, Tax Policy and Feminism: Competing Goals and Institutional Choices, 96 COLUM. L. REV. 2001, 2046 (1996).
207. In fact, I would argue that it does not. The decision to be a stay-at-home parent is an intensely personal choice with which the government should not interfere, and it involves elements of both the parent's welfare as well as the child's. The effect of daycare on children is, as of yet, unclear. Studies of its effects have produced contradictory reports. See Michael Baker et. al, Universal Childcare, Maternal Labor Supply, and Family Well-Being, 10-11 (Nat'l Bureau of Econ. Research, Working Paper No. 11832, 2005), available at http://www.nber.org/papers/w11832 (detailing conflicting reports on the effect of childcare on wellbeing of the child).
208. Baker and his team found that daycare in Quebec increased parents' perception of their children's hyperactivity, aggression, inattention, health, motor and social skills. Id. at 4.
209. They note, however, that there are a variety of explanations for the result, including the study's reliance on parents' subjective observations. Id.
210. Other studies indicate that the rise of the dual-income family has not been detrimental to children. For instance, a corresponding increase in paternal participation has been shown to aid children's cognitive development. See Edward J. McCaffery, Taxation and the Family: A Fresh Look at Behavioral Gender Biases in the Code, 40 UCLA L. REV. 983, 1048 (1993).
211. In addition, children raised by stay-at-home mothers are more likely to exhibit gender bias against women. Id.
212. Another study has shown that children benefit from growing up with a mother who is satisfied with her occupation rather than one who feels stifled. Id. It is fair to say that there is no real consensus on the net effect of mixed care.
213. See Alstott, supra note 156, at 2047.
214. Professor Alstott notes that tax policy proposals that affect women are often met with criticism because feminist scholars "differ significantly in their objectives." Id. at 2002.
215. She details three such conflicting objectives: equal treatment of men and women, encouragement of market labor participation, and the provision of financial security to caregivers. Id.
216. Family allowances, like the family taxable unit, "represent a middle ground." Id. at 2053.
217. See also Allan J. Samansky, Child Care Expenses and the Income Tax, 50 FLA. L. REV. 245, 251 ( 1998) (recommending the deduction of childcare expenses as business expenses as a "fair" solution that will "prevent the income tax from inordinately distorting people's choices.").
218. In the past, the role of law and culture in encouraging women to choose a particular course-
219. that of staying at home-is at bottom of the problem that has generated the push to encourage women's labor. Amy Wax has noted that societies have attempted to keep women out of the labor market "through the application of custom, law or force to, in effect, close off choices entirely or alter the background conditions against which choices are made." Amy L. Wax, Caring Enough: Sex Roles. Work and Taxing Women, 44 VILL. L. REV. 495, 495 (1999). This societal approach is objectionable because it sequesters some women who would have preferred to participate in the labor market. It is curious, then, that some feminist scholars would encourage lawmakers to once again "alter the background conditions" in a way that could result in pressure on women who would prefer to remain at home.
220. See Alstott, supra note 156, at 2045.
221. 26 U.S.C.A. § 21(a) (West 2006).
222. Id.
223. Id. § 21(b)(2)(A).
224. Id.
225. Id. § 21(b)(2)(B), (C).
226. Id. § 21(b)(1)(A).
227. McCaffery, supra note 156, at 1060.
228. Susanne Pagano, Tax Experts Urge Panel to Address Fairness, Families in Reform Proposal, Daily Tax Rep. (BNA) No. 56, at G-8 (Mar. 24, 2005).
229. Id.
230. See Internal Revenue Code (CCH) 102-05 (Jan. 2006).
231. See INTERNAL REVENUE SERV., DEP'T OF THE TREASURY, 2006 1040 INSTRUCTIONS (2006), available at http://www.irs.gov/pub/irs-pdf/i1040gi.pdf.
232. See, e.g., Pension Protection Act of 2006, Pub. L. No. 109-280, 120 Stat. 780;
233. Gulf Opportunity Zone Act of 2005, Pub. L. No. 109-135, 119 Stat. 2577;
234. Energy Tax Incentives Act of 2005, Pub. L. No. 109-58, §§1333, 1335, 1341, 119 Stat. 594, 1026-49;
235. American Jobs Creation Act of 2004, Pub. L. No. 108-357, 118 Stat. 1418;
236. Working Families Tax Relief Act of 2004, Pub. L. No. 108-311, 118 Stat. 1166;
237. Jobs and Growth Tax Relief Reconciliation Act of 2003, Pub. L. No. 108-27, 117 Stat. 752;
238. Job Creation and Worker Assistance Act of 2002, Pub. L. No. 107-147, 116 Stat. 21;
239. Economic Growth and Tax Relief Reconciliation Act of 2001, Pub. L. No. 107-16, 115 Stat. 38;
240. Taxpayer Relief Act of 1997, Pub. L. No. 105-34, 111 Stat. 788;
241. Small Business Job Protection Act of 1996, Pub. L. No. 104-188, 110 Stat. 1755.
242. Kornhauser, supra note 147, at 88.
243. See generally Michael J. Mclntyre & Oliver Oldman, Taxation of the Family in a Comprehensive and Simplified Income Tax, 90 HARV. L. REV. 1573 (1977).
244. Boris I. Bittker, Federal Income Taxation and the Family, 27 STAN. L. REV. 1389, 1449 (1975).
245. Id.
246. Allan Samansky has noted this problem as well. SeeAllan J. Samansky, Tax Policy and the Obligation to Support Children,57 OHIO ST. L.J. 329, 351 (1996).
247. McIntyre & Oldman, supra note 173, at 1575.
248. Id. at 1575-76.
249. McIntyre and Oldman view the benefits received and shared by family members as a kind of consumption. Id. at 1577.
250. For example, although a parent who buys groceries is a "consumer in the market sense," family members are the actual consumers of the food that the parent brings home. Id.
251. Id.
252. The professors do not address the question of whether a parent who earns income consumes it by spending it on goods and services provided to the family. They assert that the question is irrelevant because the child is the taxpayer with whom they are concerned. See id. at 1603. This feint blurs the issue of whether they intend the Haig-Simons definition to apply to the family as a whole or to the individual members. If applied to individuals, it follows that the earner parent should be viewed as engaging in consumption when he or she provides resources to the family. This would result in doublecounting under the proposal.
253. Id. at 1595.
254. Id. at 1596.
255. A relevant question might be whether a child's consumption level changes over time and, if so, whether the tax system should take that change into account. Consumption might also be affected by the number of children. For instance, second and third children blessed (or cursed) with hand-me-downs might consume less. Id.
256. Finally, there might be an income level so blatantly in excess of children's consumption that it should not be split among them. Id.
257. Id. at 1594.
258. Id. at1605.
259. Id. at 1605.
260. HUGH J. AULT & BRIAN J. ARNOLD, COMPARATIVE INCOME TAXATION: A STRUCTURAL ANALYSIS 263 (2d ed. 2004).
261. Bittker, supra note 174, at 1449.
262. Mclntyre & Oldman, supra note 173, at 1575.
263. Lari, supra note 117, at 239.
264. Adam Hirne, Getting Schooled by the Hybrid-Based Tax: Equity and Efficiency in the Federal Tax Treatment of Debt-Financed Post-Secondary Educational Expenditures, 77 S. CAL. L. REV. 871, 873 (2004).
265. In my opinion, this is changing. Future parity, I predict, will remove the secondary earner penalty from the category of gender concerns into that of questions of overall fairness.
266. Among others, see Amy C. Christian, The Joint Return Rate Structure: Identifying and Addressing the Gendered Nature of the Tax Law, 13 J. L. & POL. 241, 365 (1997);
267. Kornhauser, supra note 147, at 108.
268. Bittker, supra note 174, at 1396.
269. Id.
270. Id.
271. See Christian, supra note 190, at 365; Kornhauser, supra note 147, at 108.
272. Christian, supra note 190, at 248.
273. Id. In my opinion, arguments like this one, which assume that women are generally secondary earners, are increasingly dated and serve to reinforce traditional gender roles even more than a tax system the language of which is gender neutral. For the time being, however, I will assume, in the absence of strong empirical evidence to the contrary, that this hard-thought and, for some, genuinelyheld feminist position remains temporarily viable.
274. Id. at 255-56.
275. Id. at 248.
276. Id. at 255-56.
277. Id.
278. 281 U.S. 111(1930).
279. 282 U.S. 101 (1930).
280. Kornhauser, supra note 147, at 65.
281. Id. at 66-67.
282. McCaffery, supra note 156, at 985-86.
283. Kornhauser, supra note 147, at 78.
284. Id.
285. Id. at 80.
286. Id. at 108.
287. Id. at 108.
288. ALSTOTT, supra note 89, at 96.
289. I am not alone in this assertion. Donald Tobin has noted that "[a]t all income levels, investment in children-in education, housing, training, and nutrition - has significant beneficial returns for both the recipients of the investment and society as a whole." Tobin, supra note 89, 458.
290. Professor Tobin therefore recommends the creation of "Child Investment Funds" that would provide children under the age of fifteen with a yearly stipend of approximately $2,000. Id. at 459.
291. See also Rolf George, Who Should Bear the Cost of Children?, 1 PUB. AFF. Q. 1, 31 (1987) ("Children grow up and become, among other things, providers of pensions, maintainers of society. . . . Now since they are free agents, escaping thus the control of their investors, they become res ominia, benefit everyone.").
292. See JOINT COMM. ON TAXATION, 99 TH CONG., ANALYSIS OF PROPOSALS RELATING TO COMPREHENSIVE TAX REFORM 3-7 (Comm. Print 1985).
293. Id.
294. My calculation is based on data available from INTERNAL REVENUE SERV., DEP'T OF THE TREASURY, STATISTICS OF INCOME, INDIVIDUAL COMPLETE REPORT 2003, PUBLICATION 1304, at Table 3.4 (2005), available at http://www.irs.treas.gov/pub/irs-soi/03in34tr.xls.
295. Joint filers and heads of household submitted 57,252,816 returns during the year. Id.
296. 12,024,810 of them reported income in the lowest bracket, and 23,187,937 of them reported income in the second lowest bracket. Id. These data do not distinguish between filers who have children and those who do not, so my calculation is truly a rough estimate.
297. Furthermore, economists have found over the past decade that the birthrate among women who receive welfare does not vary according to increases or decreases in welfare benefits. Theodore Joyce, Robert Kaestner & Sanders Korenman, Welfare Reform and Non-Marital Fertility in the 1990s: Evidence from Birth Records 3-4 (Nat'l Bureau of Econ. Research, Working Paper No. W9406, 2002), available at http://nber15.nber.org/papers/w94060 (surveying available literature and concluding that studies of the effect of benefit changes on birthrate have proven inconclusive);
298. see generally Melissa Schettini Kearney, Is There an Effect of Incremental Welfare Benefits on Fertility Behavior? A Look at the Family Cap, 39 J. HUM. RESOURCES 295 (2004) (demonstrating that vital statistics data reveal no decline in birthrate in response to family benefit caps). It is logical to conclude, based on these findings, that even if the family taxable unit were structured to include a refundable credit, it would have no effect on the fertility of the lowest income families. Such families, who traditionally have a higher birthrate than the remainder of the population, simply may not view their relative lack of means as a disincentive to childbearing. As a result, it makes little sense to extend to these families the removal of a disincentive that they do not perceive as such when they might be better aided by assistance in another form, such as school choice vouchers. It bears repeating that I am not arguing that low-income families would not benefit from added financial assistance. I am simply stating that added financial assistance is unlikely to increase the birth rate among these families.
299. See Gary S. Becker, Missing Children, WALL ST. J., Sept. 1, 2006, at A14 (stating that those concerned about environmental pressure resulting from increased population have overlooked the fact that younger, denser populations are more innovative and therefore less likely, as a result of better technology, to stress the environment).
300. LONGMAN, supra note 5, at 30.
301. France has a fascinating history of pro-natalism that extends back to the early twentieth century. See Marie-Monique Huss, Pronatalism in the Inter-War Period in France, 25 J. CONTEMP. HIST. 39 (1990).
302. As a political movement during the period between the first and second world wars, pro-natalism appealed to supporters of national defense, family-centered groups and moralistic groups. Id. at 40.
303. The idealogy enjoyed wide popularity, and many of the social programs that began during its heyday serve as the foundation for France's current and generous system of family support. See generally id.
304. The idea was so well-accepted that the post-Vichy government devoted twenty-two percent of the country's GNP to redistribution in favor of families. Id. at 64.
305. See also Rachel Henneck, Family Policy in the US, Japan, Germany, Italy and France: Parental Leave, Child Benefits/Family Allowances, Child Care, Marriage/Cohabitation, and Divorce 9 (May 2003), available at http://www.contemporaryfamilies.org/subtemplate.php?t=briefingPapers&ext= InternationalFamilyPolicy.
306. Id.
307. Id.
308. Id.
309. Id. at 9.
310. Id. at 10.
311. Women take six weeks of leave before and ten weeks of leave after the births of their first two children. Id.
312. They take eight weeks of leave before and eighteen weeks of leave after the birth of their third child. Id.
313. Id.
314. Id.
315. AULT & ARNOLD, supra note 184, at 219.
316. Id.
317. Guy Laroque & Bernard Salanie, Fertility and Financial Incentives in France (Ctr. for Research in Econ. and Statistics, Working Paper No. 2003-32, 2003), available at http://www.crest.fr/pageperso/lma/laroque/ fec3e.pdf; Reinstadler et al., supra note 82, at 551.
318. Reinstadler et al., supra note 82, at 551.
319. Id. at 516.
320. AULT & ARNOLD, supra note 184, at 263. France has a fascinating history of pro-natalism that extends back to the early twentieth century. See Huss, supra note 219.
321. Id.
322. The pact de civil solidarite joins unmarried partners of any sex. Id.
323. Enacted in 1999, the pact allows couples to determine their own property relations by contract, and couples are treated as partners for social security purposes. Henneck, supra note 219, at 11. In my opinion, this arrangement benefits society by rendering at least one aspect of the system of taxation marriage-neutral, something that should be considered in the United States as a compromise between supporters and opponents of gay marriage. The idea is a good one because it permits the federal government to administer laws on a non-prejudicial basis while leaving moral questions to the states. On a pure policy level, if adoption of the household as the taxable unit is predicated upon a correlation between increased consumption and increased household size, marital status should not play a role in determining the amount of tax owed by a household.
324. AULT & ARNOLD, supra note 184, at 263.
325. Id.
326. Id.
327. Id.
328. Id.
329. Id.
330. Id.
331. Id.
332. Lawrence J. Speer, France Will Accelerate Income Tax Reductions Planned for End of 2007, Daily Tax Rep.,(BNA) No. 182, at G3 (Sept. 20, 2006).
333. AULT & ARNOLD, supra note 184, at 263.
334. Lari, supra note 117, at 231.
335. Id. at 237.
336. AULT & ARNOLD, supra note 184, at 41 (noting that total tax revenues equal roughly 45% of France's GDP and that income tax revenues equal roughly 11% of the GDP).
337. Lari, supra note 117, at 231.
338. Id. at 231.
339. AULT & ARNOLD, supra note 184, at 40.
340. WATTENBERG, supra note 1, at 210. Some, but not all of its success is due to the continued fertility of the second and third generation of the descendents of immigrants.
341. Pierre Yves-Roger, In France, a Modest Rebound for Babies, CHI. TRIB., Jan. 17, 2007, at § 1, 10.
342. Id.
343. U.S. DEP'T OF THE TREASURY, BLUEPRINTS FOR BASIC TAX REFORM 26 (1977).
344. Id.
345. Id.
346. Nicholas Eberstadt, Population, Resources, and the Quest to "Stabilize Human Population": Myths and Realities, in GLOBAL WARMING AND OTHER ECO-MYTHS 61, 62-63 (Ronald Bailey ed., 2002).
347. WATTENBERG, supra note 1, at 137.
348. Whether they would do so or not is, of course, a separate question.