Updated at 10 a.m. ET on November 14, 2019.
The Rube Goldberg mess of the United States tax code picks winners and losers as it raises trillions of dollars for the federal government. It advantages unearned income over earned income. It advantages big, mortgaged homes over little, rented apartments. It advantages the richest of the rich over the merely rich. And, in many cases, it advantages men over women.
That last claim is the contention of three new reports produced by the National Women’s Law Center and several other research and advocacy groups. They analyze the tax code through the lens of gender and conclude that many provisions reflect, amplify, and entrench long-standing disparities between men and women.
But it need not be so. The tax code has profound power to close the gender wage-and-wealth gap, as well as to support equality in the workplace and help families thrive at home. As the country debates taxing billionaires out of existence, it might consider taxing the patriarchy out of existence, too.
Ariel Jurow Kleiman, an assistant law professor at University of San Diego and one of the authors of the reports, told me she and her fellow researchers looked at how the tax code affects women’s work, earnings, entrepreneurship, family formation, and ability to accumulate wealth.* The code is progressive, shunting money from rich to poor, and contains many provisions aimed at boosting women’s employment and earnings prospects, she noted. Nevertheless, that close look still showed “a landscape of comprehensive disadvantage,” she told me, one that surprised her in its pervasiveness.
For one, the tax code subtly pushes women out of the workforce through the so-called marriage penalty and secondary-earner bias. Many women are the lower-earning partner in a married couple, thanks in part to forces that relegate women to less remunerative professions and pay them less for the same work. These married women often pay higher tax rates than they would if they were single, in some cases losing access to lucrative tax credits too. That discourages them from working; indeed, studies demonstrate that tax policy is a major reason for the persistence of the gender labor-participation gap and the gender wage gap in the United States. (The Trump tax cuts eliminated many of these penalties and biases, but not all of them.)
The tax code also cements existing disparities between men and women through the preferential treatment of investment income and benefits. “Low effective tax rates on the highest-income earners widen the disparities between executives, who are typically white men, and the poorly paid workforce, often made up of women of color,” says Katy Milani, the director of advocacy and policy at the Roosevelt Institute, stressing how important it was to understand intersectional disadvantage in the tax code.
The way the tax code treats businesses also disadvantages women, in some ways. For instance, tax policy seems to quietly prioritize male-dominated, capital-intensive businesses, such as firms in construction, computing, and robotics, by allowing them to deduct the cost of new machinery. Service-oriented businesses, which women are more likely to start than manufacturing businesses, get less advantage.
Finally, and perhaps most important, the reports stress that the tax code encourages wealth building among the already wealthy, amplifying existing economic fault lines. And it fails to fund many women’s most urgent priorities, including universal health care, subsidized child care, universal prekindergarten, and paid family leave. Those kinds of policies would help keep women in the workforce and eliminate the wage penalties women face if they have kids.
The reports’ goal is to highlight gender as an often-overlooked but important heuristic for understanding the tax code, the authors say. “Nowhere in today’s tax code does it explicitly say that women shall be treated differently than men, or families of color treated differently than white families,” one report concludes. “But while the language of our tax laws may be neutral on its face, in many instances, its impact disadvantages women and people of color in practice.”
Still, its authors recommend that the government start collecting more data on gender and taxes. “That is one thing that [the Treasury Department] could be doing that would at least inform policy makers and think tanks and advocates as to how these benefits are being distributed,” Jurow Kleiman told me. “It’s a step zero that we should be doing and we’re not doing.”
Other steps include taxing investment income like labor income, adding refundable tax credits and other supports for low-income working families, and doing more to support families with young children. Those kinds of provisions would help women. And by helping women, they would help the broader economy, too.
* Due to an editing error, Ariel Jurow Kleiman's school affiliation was originally incorrect.