"While political rhetoric supports family values, and commentators are mystified about what has happened to the family in recent decades, McCaffery demonstrates very clearly that, where tax policy is concerned, we have become an anti-family society."—Shirley Burggraf, Lingua Franca
"Read this book and you will be angry, you will tell others to read it, you may even be inspired to learn more about tax law. Through this forceful analysis of the cultural, economic, and behavioral consequences of income tax law, McCaffery reminds us that taxes are not only good to think with. It is vital that we think about them often, seriously, and critically."—Elisabeth S. Clemens, Law and Social Inquiry
An interview with
Question: Professor McCaffery, can you tell us, in a nutshell, what the basic story of Taxing Women is?
McCaffery: The United States tax system is a product of the 1930s and 1940s. At that time the single-earner model was the norm for families—men worked outside the home and women worked inside it. Tax policy decisions favored and rewarded this arrangement and made it difficult to be a two-earner family—made it difficult for married women with children to work. Over time those biases have gotten worse, but we haven't really re-examined them.
Q: What do those biases mean in real terms? How do they affect working women and their families?
McCaffery: The book actually opens with two real-world stories, one of a woman who discovered that her $18,000 a year job was in fact losing money for the family, the other of a woman who discovered that her $35,000 a year job was bringing home very little. As a result, both of them left their jobs. A very large part of the book is to explain what's behind these two stories.
Let me walk though an example. Imagine a family with a husband who makes $60,000 a year and a wife who stays home with the two young children. The wife is offered a job paying $30,000 a year. The question is: how much of a raise would the husband have to get to bring home as much money as the wife would bring home if she took this $30,000 job? The surprising—even shocking—answer is as little as $2,000.
Q: Only $2,000? That's pretty dramatic. How do you arrive at that figure?
McCaffery: The wife would enter the workforce at a 50% bracket, roughly, considering federal income taxes, social security, and state and local taxes. So her $30,000 becomes $15,000, right off the bat. Plus the family will probably need to pay for child care for their two children. Let's say child care costs run $200 a week or $10,000 over a fifty-week year—not an unreasonable figure for an upper-middle-class family. They can claim a child care credit on their tax return, but it's only $1,000—actually a little less—so her $15,000 is now down to $6,000, after subtracting child care costs and adding the credit. Next, there will be other costs—one of the interesting things I learned while researching this book was how many and how much additional expenses two-earner households face—things like commuting, dry-cleaning, more restaurant meals, housekeeping expenses, and so on. If these run the working wife $100 a week, or $5,000 a year, she is down to $1,000, and the tax laws don't help at all with this final category of work-related expenses. So her $30,000, before taxes, has become $1,000, after taxes and work-related expenses.
The husband can bring home that much—I should say that little, really—by earning an additional $2,000 or so. He's actually now in a lower tax bracket than his wife is, once he has passed through the ceiling or maximum amount for which social security taxes are collected.
Q: In Taxing Women you say that this was intentional.
McCaffery: Well, intentions can be hard to pin down when you are talking about large institutional actors, like the U.S. government or the federal tax system, writ large. But, yes, I think that there is ample evidence that major players in the development of the tax laws knew about these biases and were glad for them, and it certainly keeps getting worse.
Much of the book is historical—all of chapters two and three for example. I should add that this was all new work for me; I had done much of the analytic work, in tax and economics, before I sat down to write the book, but I felt that a historical perspective would add to the story. And it did, enormously. For example, I learned that social security was revised in 1939 in a way that hurt married working women, and the framers of that law thought it was a good thing. The "joint-filing" provision that was put in place in 1948 was a large chunk of the World War II "peace dividend"—spent to favor and reward traditional single-earner families, and rich ones at that. Once again, the framers of the law knew it would make it harder for married working women, and they thought that was good—a way to get married women back into the homes they had left, briefly, during the war.
After that point, it was largely a matter of resisting changes—like better child care credits or deductions, or secondary-earner relief—that might have helped working wives. As recently as 1980, for example, Pete Stark, a Democrat, suggested that if tax law had to help any kind of family, it should help single-earner ones, because jobs are scarce and the system should reward families where one spouse stays home. Traditional forces, including many Republicans, like the bias for another reason—they believe mothers should stay at home, and they are willing to use tax policy to further that end.
Q: So what you are saying is that this is a political story?
McCaffery: Very much so. Tax is a very political subject. It is also a very big matter—taxes today account for two trillion dollars annually, one-third of our national economy. I devote an entire chapter—chapter nine—to a critique of the tax proposal in the Contract with America for a per-child—not child care—credit. That turns out to be a very sophisticated piece of political strategy designed to keep women in the home.
Q: The book employs many disciplines—law, accountancy, economics, history, political theory. Why do you think all these perspectives are relevant?
McCaffery: That's a good question. I find, throughout my work, that I am interested in problems that affect real people as they try to better their lives. Those problems are necessarily interdisciplinary ones, because they didn't start in some academic laboratory or library. They started in the real world, and that's a multi-disciplinary place.
In the particular case of the ideas and themes in Taxing Women, the variety of disciplines reinforce each other. I took to calling these sub-themes tales: the accountant's tale, the historian's tale, the economist's tale, and so on. My point was to get readers to see that each of these various perspectives show how much and how unfairly we tax working women. I tried to get away from the sense that this was just a liberal, feminist perspective—that there really is something deeply wrong here. I think the accounting and economic perspectives, in particular, helped with that.
Q: That brings up the question of just why you wrote the book.
McCaffery: And that's another good question. I don't necessarily know all the reasons I wrote it, in the way that we don't necessarily know all there is to know about ourselves. But I certainly want to reach an audience outside academia, to educate people about the biases and political choices that have gone into this large and complex system. I say in the book that what we don't know can definitely hurt us. There is a lot of ignorance about tax policy, perhaps especially among liberals and feminists, and so we are living with this massive but largely ignored force that shapes our personal lives. I want to present the facts about tax policy and plant the idea that we ought to be having a political discussion about the structure of tax. I've been a teacher and a scholar for many years now, and I thought I could bring both skills together and reach out to a wide audience.
Q: The early responses to the book certainly suggest that kind of audience is out there; former congresswoman Pat Schroeder says it is a "must-have primer for any woman." That must be gratifying. What do you want this book to accomplish? Are there changes in tax policy that you advocate?
McCaffery: Well, as I write at several points in the book, I was not thinking of any specific reform agenda, in part because I thought it would take a while to get the ideas of the book out, and I didn't want the dialogue to bog down in discussions over this or that practical proposal. First things ought to come first, and the first thing is to realize that tax is political, and that it has very important effects on the quality of our lives, and that much of what we have in the tax code today is deeply gendered. So that still is my greatest hope: that people will read the book and whether they agree with it or not, start thinking more about tax.
Now that I have seen that we are likely to get a political audience more quickly than I imagined—Pat Schroeder's endorsement was very gratifying, as has been all the other publicity we have gotten thus far—I have started to talk more about specific reforms. We should consider moving to a system of separate filing, create a secondary earner exemption under social security, greatly increase the child-care deduction or credit, revise fringe benefit law, and look into and eliminate lower-income marriage penalties. From a technical angle, these kinds of reforms are fairly easy to achieve, though I am not naive about the workings of our political system. So, to get back to your basic question, I would like to see a more informed and energetic dialogue over the structure of tax, with maybe some specific reform ideas on the table, so to speak. And, over time, I would like to see liberals and feminists playing a bigger role in discussions about tax.
Q: Thank you very much. Is there anything else you want to add?
McCaffery: Just that I hope people get the book and read it and feel free to run questions or criticisms by me—that is really the great joy of being an author, getting ideas out and having a dialogue with an audience. I wrote Taxing Women for a wide audience, and I look forward to a correspondingly wide conversation. Thank you.
Copyright notice: ©1997 by Edward J. McCaffery. All rights reserved. This text appears on the University of Chicago Press website by permission of the author. This text may be used and shared in accordance with the fair-use provisions of U.S. copyright law, and it may be archived and redistributed in electronic form, provided that this entire notice, including copyright information, is carried and provided that the University of Chicago Press is notified and no fee is charged for access. Archiving, redistribution, or republication of this text on other terms, in any medium, requires the consent of both the author and the University of Chicago Press.