Subsidizing Spouses

http://economix.blogs.nytimes.com/2013/09/16/subsidizing-spouses/

September 16, 2013
By NANCY FOLBRE

Nancy Folbre is professor emerita of economics at the University of Massachusetts, Amherst.

The federal tax code and Social Security both contain provisions that subsidize marriage if one spouse refrains from paid employment.

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At first glance, the debate over such subsidies looks like a clash between those who want to support families and those who want to tax people as individuals. A closer look, however, shows that pro-marriage policies are not necessarily pro-family policies, because they don’t consistently reward effort devoted to caring for dependents such as children and the elderly.

A stay-at-home spouse who redecorates the living room, prepares gourmet meals and greets his or her partner at the door with a martini receives the same federal income tax treatment as one who raises several children and cares for sick, disabled or elderly family members.

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Relatively few families in the bottom 45 percent in income pay federal income taxes, so they receive no benefit from the exemption. But most workers pay Social Security taxes that subsidize marriage even more generously. Those taxes that wage earners pay are not affected by their marital status, but married earners can receive an additional 50 percent of their individual retirement benefit to support a spouse who either lacks eligibility for earnings based on his or her own employment or opts for a spousal rather than an individual benefit.

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