Why are gender and unpaid work issues continually marginalized in tax policy analysis? After all, feminist legal theorists have spent at least two generations trying to address questions that should be at the center of any analysis of government policy, no matter one’s political priors. People who want to turn the clock back to a 1950’s-style gendered hierarchy, for example, surely would want to know that their version of utopia (which, to be clear, I find positively dystopian) cannot possibly be created without understanding how government taxation and spending policies change people’s decisions about marriage and divorce, child-bearing and -rearing, the challenges of poverty (both sudden and chronic), and so on. Progressives are typically more aware of those connections, but somehow the “tax is different” mantra prevents many people from seeing that gender justice and tax justice are inseparable.
Miranda Stewart, a professor of tax law at the University of Melbourne, has long carried on important work to bring these issues to the fore. Her latest book, Tax & Government in the 21st Century, is a masterwork that covers the full range of issues that confront us, from savings and wealth, to corporate and business taxation, to the global digital economy, and every important issue in between. She builds her book on historical and philosophical foundations, discussing Adam Smith and the interactive development and evolution of states and capitalism (of various varieties). Confronted with a veritable buffet table of enticing potential topics to savor in this short review, I find that her most profound contribution (among many) is in Chapter 5, “Tax, Work, and Family.”
Most books that have attempted the daunting task that Professor Stewart tackles here with such grace have, like much of the literature in this field more generally, tended to treat gender and family issues as a niche topic, as I noted above. In this book, those issues are given equal airtime with classic tax policy topics like capital gains taxation or international jurisdictional disputes. That makes sense, of course, because Professor Stewart is deeply familiar with feminist legal theory, even as she has expertise across the range of topics that she covers in this book.
She begins by defining the “tax state” as having the power to tax but also being dependent on taxation to fund its own activities, noting that wealthier countries, including most of the members of the Organization for Economic Cooperation and Development (P. 3), are tax states. How have those countries’ tax and expenditure systems responded to, and in turn changed, people’s experience of gender and family issues, paid work, and the unpaid work of providing for those who need care? Professor Stewart demonstrates that these issues should be at the front of everyone’s mind, especially policymakers whose decisions (even when they decide to leave policies unchanged) will alter the future.
A particular strength in Chapter 5 is the impressively brief explanation of a fundamental question in all of tax analysis, the “tax unit.” This is where feminist tax theorists have had a significant impact (one that should be even greater, to be sure), because it matters enormously whether the state taxes a “family unit” as a collective entity or instead taxes each individual person within society – no matter their family status – as a solo unit. Professor Stewart offers this summary of the intellectual history of this insight:
Feminist tax theorists pioneered a tax discrimination analysis that argued for an individual unit on efficiency and equity grounds. A key reason or this trend was changing demographic patterns, especially the increased participation of women in the workforce.
The rules about the tax unit, combined with personal and family exception, allowances and transfers, mark a gendered boundary between the ‘taxed’ market and ‘untaxed’ private or domestic family life. Home production is not subject to the income tax, although in a comprehensive income tax applied to individuals, it would be. (P. 126.)
This sleek, stripped-down prose communicates matter-of-factly what is in fact a rather revolutionary thought to a lot of people: there is no “natural” default when it comes to setting up a tax system, even on one of the foundational questions of tax policy: Who will be required to pay taxes? And the choice that we make affects social choices, as Professor Stewart goes on to explain, by changing the marginal tax rates faced by different people, depending on whether their partners’ or spouses’ tax situations are included in their own computations. She concludes:
It is estimated that in Germany and Belgium, moving from a joint tax unit [taxing a couple] to an individual tax unit [taxing each person in the couple separately] would increase women’s work hours by 25 to 35 per cent. In response to these findings, the European Parliament has called for the elimination of joint or family-based provisions in the tax laws of all EU member states and their replacement with individual based rules. (P. 127.)
This analysis is supplemented by an explanation of how eligibility rules for parental leave, child-care costs, fighting discrimination against fathers who take parental leave, child credits (which are now the method by which the US tax code subsidizes child-rearing costs, after the repeal of personal exemptions as part of the most recent major tax legislation in the US took effect in 2018), and other purportedly pro-family policies interact with the “tax unit” question in unexpected ways. She reports that “[a]cross the OECD, women’s careers are one third shorter, on average, than men’s and are much more likely to involve part time work.” (P. 128.)
The analysis in Chapter 5 builds on a discussion earlier in the book on budgeting, which includes a discussion of how governments’ summaries of their budgets can highlight gender imbalances. Professor Stewart describes “Gender Budgeting” (Pp. 71-72) as a way to highlight how these nominally neutral tax and spending policies affect people unexpected ways – ways that would otherwise be erased through the use of supposedly “gender-blind” budget summaries.
While it is not quite accurate to say that the tax-policy book market is a crowded one, there are surely plenty of perfectly fine books from which to choose, all of which cover the standard topics (tax base, international tax, wealth taxation, and so on) well enough. What makes this book stand out is not only its breadth and readability but a keen focus on how our tax system can have hidden impacts on people – and bringing those impacts into the light.
