Every spring, millions of American married couples engage in a little-discussed administrative task: filing joint taxes. Originating in 1948 when married women rarely worked outside the home, this seemingly innocuous tax policy has become one of America’s most overlooked barriers to gender equality.
The gender gap in America’s labor market is driven by more than just workplace discrimination and weak family policies. The tax code itself plays a surprisingly powerful role in subjecting the lower earner (usually the spouse) in a marriage to a higher rate. Research shows That tax policy, known as joint filing, discourages spouses from working right as their careers begin — affecting everything from their mid-career promotions to their long-term retirement savings. And more women are holding down jobs than beforeMore women face joint filing penalties than ever before.
While this arrangement may support marriages where one partner provides unpaid care or needs more flexibility, it is difficult to justify when the practice ends. 40 percent marriage Divorce ends when research shows it keeps women from working, and when virtually every developed country has moved on. A complete overhaul of joint filing would raise taxes for most married couples—at least in the near term, setting up unwieldy and possibly intractable politics. But a set of narrow reforms seems possible.
Joint filing trap
In the early 20th century, most states followed English common law, where a married man’s income was considered his alone. However, few states have followed suit Community Property Law — Recognition of marital income jointly owned by both spouses. Supreme Court in 1930 Rights reserved Community property states allow couples to file joint taxes, a practice that allows them to pay less to the government overall. Then, in 1948, Congress This extends the joint filing system Standardization of practice nationwide, for all married couples.
In a mid-20th century world where most married women were stay-at-home wives, the main effect of this change was to provide tax relief to these more traditional families. Breadwinner husbands were able to share their income with their non-working wives and pay less tax. But the newly established system included a built-in penalty for secondary earners that would become increasingly problematic as more women sought to join the workforce.
Here’s how the joint filing trap works: Under our tax system, higher incomes face higher marginal rates, meaning a couple’s combined income can push them into a higher tax bracket than if they filed separately. A married woman’s earnings, assuming she earns less than her husband, are taxed at a higher rate determined by her husband’s income. Joint filing essentially “stacks” on top of his income for tax purposes.
To get more concrete, let’s say a woman, Kate, who earns $100,000, marries Jack, who earns $200,000, and they decide to file jointly. Together, their combined income would fall under $300,000 24 percent tax bracket For joint filers. If Kate had filed individually, she would have been taxed in the 22 percent tax bracketwhile Jack’s $200,000 would push him into the 32 percent bracket. Simply put, Kate is taxed more on her earnings when she files jointly with Jack.
However, married couples in the United States have options Filing separatelyless than 7 percent In fact, because it almost always subjects their families to higher taxes than joint filings, they may lose other benefits as a result. In this scenario, Kate and Jack’s take-home pay would be roughly $5,000 more than if they were filing jointly if they went “married filing separately.”
This is tax dynamics Shaping women’s behavior. Early in their careers, married young women often decide it makes more sense to quit work or go part-time, so their families can save on childcare and pay less in taxes.
Recent economic studies have concluded that eliminating joint filings in the US will increase significantly Labor force participation of married women throughout their lives.
“While the effects of collective taxation are most acute in early and mid-career, their cumulative effect shapes women’s lifetime economic trajectories,” Maria Cristina de Nardian economist at the University of Minnesota, told Vox. She found it “amazing” how the impact of joint filings continues across age groups and, despite women’s growing educational attainment and ambitions, today “continues to resist greater social progress”.
America stands increasingly alone in maintaining this system. In the decades following World War II, most countries copied America’s joint filing system, but in the 1970s and 1980s—both Advance gender equality And to increase overall employment – almost all OECD countries have reverted to separate tax filing systems.
Empirical evidence of these reforms is notable: Sweden, which abandoned the joint filing system in 1971, Employment of married women has seen a significant increaseas Canada didwhich shifted to separate taxation system in 1988. In contrast, when the Czech Republic bucked the international trend and introduced a collective tax system in 2005, the number of married women in the workforce went down.
Can we fix it in the US?
Joint filing meant supporting men in traditional marriages, which consisted of a male breadwinner and his stay-at-home wife. Labor market inequality in the 20th century kept black men’s wages low, leaving most black wives unable to stay at home.
“Joint Returns was never about helping women — it was about helping white guys pay less in taxes,” said Dorothy BrownProfessor of Tax Law at Georgetown University.
Defenders of joint filing argue that the model supports “household specialization” by enabling one partner to focus on valuable unpaid work such as caregiving. But in an era of longer life expectancy, more dual-earner families and higher divorce rates, that argument looks increasingly thin. In 2012, the US Government Accountability Office A study published shows that a divorced woman’s income drops by an average of 41 percent after divorce, nearly double the drop experienced by men. Academic research published in 2020 similarly found that wives who divorce after age 50 see A 45 percent decline on average Their standard of living, compared to a 21 percent decline for husbands.
The path to joint filing reform in the United States faces unique challenges. Today, any complete elimination of the practice would likely be politically dead in the water.
In the 1990s, when federal lawmakers proposed an optional individual tax filing system for married couples — not unlike the “married filing separately” option — conservative groups rallied strongly against it. The activists argued about it will create a “homemaker penalty”. when Undermining the institution of marriage By encouraging marriage. Individuals filing separately would have been eligible for benefits and tax deductions they could not access by filing jointly or “married filing separately,” but the proposal failed, leaving married couples with only those two options.
University of Southern California Law Professor Edward McCaffery, Author of a 1997 book Regarding joint filing, said that the political response to this proposal is revealing, because the law was already a concession to social conservatives because it did not aim to completely eliminate joint taxation. “When Phyllis Schlafly and the Liberty Foundation came out against it, it was dead on arrival,” McCaffery told Vox. “It became clear that it wasn’t enough to not hurt traditional families, you also had to give them some special goodies.”
The US system is particularly involved because the health care and retirement systems have evolved over decades around joint family benefits. Married couples who file jointly, for example, generally qualify for lower health insurance premiums and more comprehensive coverage than those who file separately. Likewise, filing jointly gives married couples greater access to their spouse’s Social Security benefits.
Past decisions about work and family — including career gaps that erode skills and networks — also create stickiness. “Lock-in” effect It will be difficult for millions of couples to reverse that, even if Congress abandons joint filing tomorrow.
Still, more targeted reforms could work. During the Reagan administration, Congress briefly implemented it A tax exemption for secondary earnersBasically reducing the tax penalty on spouses by allowing couples to deduct 10 percent of the lower-earning spouse’s income, up to $3,000. There are some economists Proposal to bring back this idea.
Michael GraetzA tax professor emeritus at Columbia and Yale Law School, advocates reinstating the middle-earner deduction and expanding child care subsidies. These changes will help protect secondary earners at a critical career juncture, when child-rearing responsibilities often force women to reduce their working hours for financial reasons.
Tax policy may not be the first thing on the agenda for most feminist activists, but collective filings are powerful in reconsideration. As Di Nardi’s research shows, joint filing still poses a major barrier to women’s participation in the workforce, even for younger and more educated women.
“Over time, political inertia and the complexities of encumbered tax reform have likely contributed to its persistence,” he said. “Policymakers and the public may underestimate the long-term costs.”
