CHALLENGING GENDER INEQUALITY IN TAX POLICY MAKING This volume takes a critical look at the gender of tax policy around the world Contributors based in eight different countries examine the profound effects that gender norms and practices have had in shaping tax law and policy, and how taxation in turn impacts upon the possibilities for equality along gender, race, class, sexuality and other lines Chapters explore how the gendered fiscal state might be theorized; how structural choices about rates and bases in tax policy design contribute to gender inequality; how tax policy affects family configurations and perceptions of what constitutes family; how fiscal systems impact on savings and wealth accumulation by women and men; and the role of different policy-making processes and institutions in occluding and sometimes challenging these patterns Most significantly, perhaps, the book explores these questions in an international frame, traversing countries and continents The conclusion: fiscal policy has deep-rooted, long-standing gender implications that affect virtually every aspect of our social, political and economic lives whether we live in Canada, Australia or Kenya Oñati International Series in Law and Society A SERIES PUBLISHED FOR THE OÑATI INSTITUTE FOR THE SOCIOLOGY OF LAW General Editors Rosemary Hunter David Nelken Founding Editors William LF Felstiner Eve Darian-Smith Board of General Editors Carlos Lugo, Hostos Law School, Puerto Rico Jacek Kurczewski, Warsaw University, Poland Marie Claire Foblets, Leuven University, Belgium Roderick Macdonald, McGill University, Canada Recent titles in this series Changing Contours of Domestic Life, Family and Law: Caring and Sharing edited by Anne Bottomley and Simone Wong Criminology and Archaeology: Studies in Looted Antiquities edited by Simon Mackenzie and Penny Green The Legal Tender of Gender: Welfare Law and the Regulation of Women’s Poverty edited by Shelley Gavigan and Dorothy Chunn Human Rights at Work edited by Colin Fenwick and Tonia Novitz Travels of the Criminal Question: Cultural Embeddedness and Diffusion edited by Dario Melossi, Máximo Sozzo and Richard Sparks Feminist Perspectives on Contemporary International Law: Between Resistance and Compliance? edited by Sari Kouvo and Zoe Pearson Challenging Gender Inequality in Tax Policy Making: Comparative Perspectives edited by Kim Brooks, Åsa Gunnarson, Lisa Philipps and Maria Wersig For the complete list of titles in this series, see ‘Oñati International Series in Law and Society’ link at www.hartpub.co.uk/books/series.asp Challenging Gender Inequality in Tax Policy Making Comparative Perspectives Edited by Kim Brooks Åsa Gunnarson Lisa Philipps and Maria Wersig Oñati International Series in Law and Society A SERIES PUBLISHED FOR THE OÑATI INSTITUTE FOR THE SOCIOLOGY OF LAW OXFORD AND PORTLAND, OREGON 2011 Published in the United Kingdom by Hart Publishing Ltd 16C Worcester Place, Oxford, OX1 2JW Telephone: +44 (0)1865 517530 Fax: +44 (0)1865 510710 E-mail: mail@hartpub.co.uk Website: http://www.hartpub.co.uk Published in North America (US and Canada) by Hart Publishing c/o International Specialized Book Services 920 NE 58th Avenue, Suite 300 Portland, OR 97213-3786 USA Tel: +1 503 287 3093 or toll-free: (1) 800 944 6190 Fax: +1 503 280 8832 E-mail: orders@isbs.com Website: http://www.isbs.com © ati IISL 2011 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission of Hart Publishing, or as expressly permitted by law or under the terms agreed with the appropriate reprographic rights organisation Enquiries concerning reproduction which may not be covered by the above should be addressed to Hart Publishing Ltd at the address above British Library Cataloguing in Publication Data Data Available ISBN: 978-1-84946-123-8 Typeset by Compuscript Ltd, Shannon Printed and bound in Great Britain by TJ International Ltd, Padstow, Cornwall Acknowledgements This collection springs from a workshop held in May 2009 at the International Institute for the Sociology of Law (IISL) in Onati, Spain, the first we believe, ever to have brought together such an internationally diverse group of researchers working on issues related to tax policy and gender equality The editors are grateful to the IISL for hosting that workshop and to all its participants, most especially those who contributed to this collection of original essays Contents Acknowledgements v List of Contributors ix Introduction Lisa Philipps, Kim Brooks, Åsa Gunnarsson and Maria Wersig Part I: Gendering the Fiscal State The ‘Capture’ of Women in Law and Fiscal Policy: The Tax/Benefit Unit, Gender Equality, and Feminist Ontologies 11 Kathleen A Lahey Tax, Markets, Gender and the New Institutionalism 37 Ann Mumford Gender Equity in Australia’s Tax System: A Capabilities Approach 53 Miranda Stewart Challenging the Benchmarks in Tax Law Theories and Policies from a Gender Perspective—The Swedish Case 75 Åsa Gunnarsson Part II: Bases and Rates: Structural Choices in Tax Policy Design Taxing Surrogacy 95 Bridget J Crawford A Gender Perspective Approach Regarding the Impact of Income Tax on Wage-earning Women in Spain 109 Paloma de Villota Gender and Taxation in Kenya: The Case of Personal Income and Value-added Taxes 135 Bernadette M Wanjala and Maureen Were Part III: The Family in Tax Policy Dismembering Families 159 Anthony C Infanti The Tax/Benefit Implications of Recognizing Same-sex Partnerships 177 Casey Warman and Frances Woolley viii Contents 10 Income Redistribution Through Child Benefits and Child-related Tax Deductions: A Gender-neutral Approach? 195 Kirsten Scheiwe 11 Overcoming the Gender Inequalities of Joint Taxation and Income Splitting: The Case of Germany 213 Maria Wersig Part IV: Savings, Wealth and Capital Gains 12 Income Splitting and Gender Equality: The Case for Incentivizing Intra-household Wealth Transfers 235 Lisa Philipps 13 Indirect Discrimination in Tax Law: The Case of Tax Deductions for Contributions to Employer-provided Pension Plans in Germany 255 Ulrike Spangenberg 14 Gender and Capital Gains Taxation 275 Marjorie E Kornhauser Index 293 List of Contributors Kim Brooks was appointed Dean of the Schulich School of Law in July 2010 She formerly held the H Heward Stikeman Chair in the Law of Taxation at McGill’s Faculty of Law Professor Brooks’ primary research interests lie in the areas of corporate and international tax, and tax policy Bridget Crawford is a Professor of Law at Pace University School of Law in White Plains, New York She teaches courses in Taxation; Wills, Trusts and Estates; and Feminist Legal Theory She is the editor, with Anthony Infanti, of Critical Tax Theory: An Introduction (Cambridge, 2009) She can be reached at bcrawford@law.pace.edu You can follow her on Twitter at @ ProfBCrawford Paloma de Villota is Professor Doctor of Applied Economy at Universidad Complutense de Madrid Her research interests include labour market, fiscal and social policies and gender budgeting She writes reports for the European Commission and Spanish institutions She has collaborated with UNIFEM, ILPES, CEPAL and the Council of Europe She has worked with many European Universities in different projects and with American institutions such as FLACSO, UNAM (México) She is a member of the International Association of Feminist Economics and member of the board of the Instituto de Investigaciones Feministas (Spain) Åsa Gunnarsson is Professor of Jurisprudence and Tax Law at the Department of Law, Umeå University Her research covers a wide range of issues on law and the gendered fiscal state She currently leads a research programme funded by the Bank of Sweden Tercentenary Foundation, titled Feminist Studies on Taxation and Budgeting (FemTax) Anthony C Infanti is a Professor of Law at the University of Pittsburgh School of Law His research focuses particularly upon the intersection of tax law with sexual orientation and gender identity He is co-editor of Critical Tax Theory: An Introduction (Cambridge University Press, 2009) Professor Infanti is an elected member of the American Law Institute and the American Bar Foundation Marjorie E Kornhauser is Professor of Law at Arizona State University College of Law where she teaches tax and tax policy Her research focuses on the intersection of tax and society, including political, historical and Index ability to pay principle, 145 Germany, 265, 271 Sweden, 83, 85–86 adoption, 99 private placement adoptions, 97 agency, respecting women’s, 243–45 aggregation, marital see under women in law and fiscal policy Alexander, JC, 40 Alm, J, 178, 184 Apps, Patricia, 62 ART see dismembering families Asprey Committee Report (Australia), 53, 58, 63 asymmetrical participation in European labour market, 112–16 Augustus, 16 Australia, 1, child support, 61–63 gender equity and tax see gender equity in Australia’s tax system Howard administration and joint filing, 21–22 income splitting, 61 same-sex marriage and tax revenues, 178 taxes and government, 54 women’s budget process, 109 Australia’s Future Tax System see Henry Tax Review under gender equity in Australia’s tax system avoidance see tax avoidance Badgett, MVL, 178, 184 bases and rates of tax see structural choices in tax policy design Becker v Hessen (2003), 270 Belgium, 195, 198 Berik, G, 57, 64 Beyond Conjugality (Law Commission of Canada), 192 Bilka (1986), 270 Blair, Tony, 37, 43 Brown, Gordon, 37, 43–47 Buchanan, NH, 102 Burgoyne, C, 186 Burns, M, 186 Canada, children: benefits targeted towards single parents/low income households, 186–87 child benefits and same-sex marriage, 186–90 child benefits/support, audit of claims for, 191 tax deductions for childcare expenses, 201 fragility of women’s equality (1985–2009), 12–14 deterioration of women’s equality, 12–13 disparities in resources and opportunities, 12–13 prohibition of sex discrimination, 12 gay and lesbian community, 179–82 earnings, 180–82 income splitting, 28, 227 anti-avoidance rules, 237–38 attribution rules, 61, 237–38, 239, 241–42, 243–44 cost, 238 deductions for payments to family members for services, 246–49 dilemma of income splitting, 236–40 dividend-sprinkling, 237–38 gender equality, and see income splitting and gender equality gifts, 239, 241 incentivising intra-household redistribution, 241–42 objections to pension splitting rules, 239–40 pension income splitting, 22, 28, 177–78, 185–86, 238–39, 242 revocable trusts, and, 243–44 Tax Free Savings Accounts, 239 women’s unpaid labour, and, 245–50 individual tax system, 178, 183, 191, 236 audit of tax returns, 191 eroded by family-related concessions and joint unit for benefits, 236 medical expenses coverage, 192 reasons for individual taxation and objections to joint filings, 237–38 same-sex partnerships see under same-sex partnerships, taxing joint couple-based tax and benefit measures, 28, 178 benefits of dependency, 183–84 ‘kiddie tax’, 238 property equalization on divorce, 245 social assistance/security, 78, 190–91 retraction of benefits from partnered gays, 192 294 Index social justice, 109 unpaid work, 11–12 employed male/female lawyers compared, 13 income splitting, and, 245–50 Canadian Centre for Policy Alternatives and Choices, 109 Canadian Charter of Rights and Freedoms, 12 Canadian Community Health Survey (CCHS), 178–91 Canadian Feminist Alliance for International Action (FAFIA), 239–40 capabilities approach see under gender equity in Australia’s tax system capital gains: definition of ‘asset’, 44 gender and taxation see capital gains taxation and gender Spain, 118, 120 US, 285–86, 288 rate preference, 96 see also savings, wealth and capital gains capital gains taxation and gender, 6–7, 275–88 economic disparities between men and women, 278–80 financial decisions: gendered attitudes regarding financial decisions, 275–76 risk, competitive and confidence, 282–84 women’s communitarian worldview, and, 285, 286–88 worldviews, 281, 284 interplay of sex/gender, worldviews, attitudes and financial behaviour, 280–85 gender, financial constellation and worldviews: tentative analysis, 284–85 sex/gender and the financial constellation, 282–84 worldviews: individualism versus connectedness, 280–81 reducing capital gains preferential treatment: a balanced approach, 285–88 sex and gender, and gender essentialism, 276–78 ‘capture’ of women in law and taxation see women in law and fiscal policy Carpenter, C, 181, 182 Carter Commission (Canada), 236 Cato, 16 child benefits and child-related tax deductions, 5–6, 195–210 Australia, 61–63 Belgium, 195, 198 Canada: benefits targeted towards single parents/ low income households, 186–87 child benefits and same-sex marriage, 186–90 child benefits/support, audit of claims for, 191 tax deductions for childcare expenses, 201 Denmark, 199 Finland, 199 France, 195, 198 Germany, 195–210, 219 child benefits introduced, 198–99 childcare expenses, 266 childcare expense reforms 1996: untaxed minimums and deductions, 199–200 downgrading of gender-equalizing policies, 203–4 family policy, 198–203 gender equality versus general equality, 202–3 gender inequalities hidden by complex systems and multiple policy goals, 196–97, 209 historical background to family policy, 198–99 tax deductions for single parents/all parents, employed/unemployed, 200–201 tax legislation must take account of maintenance expenses, 195–96, 199–200 Iceland, 199 Ireland, 199 Kenya, 141 modern family policy, 195 historical background, 198–99 Norway, 199 Sweden, 62, 88, 199 UK, 4, 199, 201 universal child benefits, 196, 199, 203–4, 206 progressive tax systems, 203 see also family in tax policy children: adoption, 99 private placement adoptions, 97 asymmetrical participation in European labour market, and, 112–14 child benefits/support see child benefits and child-related tax deductions custody and property, 245 income splitting in France, and, 82–83 infertility treatment see dismembering families ‘kiddie taxes’, 162, 238 Roman law, 15, 16 Index 295 surrogacy see surrogacy, taxing unearned income of minor children in US, 162 whether same-sex marriage shifts the costs of children to families, 186–90 Cie Idéal Body v R (1989), 247 Clarke, V, 186 Commissioner v Bollinger (1988), 165 Commissioner v Duberstein (1960), 98 communitarian views, 280–81, 284, 286–87 as feminine views, 285, 286 women, and, 285, 286–88 community property systems, 17–19 US, 23–26 control of income as test for ability to pay, 59 coverture: fiscal see under women in law and fiscal policy UK common law coverture from unitas personae doctrine, 17–18 erosion of doctrine, 18–19 Crawford, Bridget, 4, 170 Cullen v Canada (1985), 246 cultural cognitions, 280–81 Darling, Alistair, 43 deductions see tax deductions demographic ageing, 1–2 Denmark: child benefits as universal system, 199 women in the labour market, 112 DFCT v Purcell (1921), 61 discrimination, indirect see indirect discrimination in German tax law dismembering families, 5, 159–74 constructing families, 161–63 concept of family as ‘ extended nuclear’, 162–63, 170, 172–73 corporealising the body family, 161, 166–69, 170, 172–73 costs associated with surrogacy as medical expenses, 96, 168, 171–73 definition of medical care, 166 infertility problems treatment, 167–68, 170 meaning of ‘body’, 166–67 treatment benefiting body family as a whole, 168–69 creating the body family, 163–66 body family as a separate person, 163–64 mutability of personhood for tax purposes, 165–66 different treatment of medical expenses for traditional and same-sex couples, 160 furthering domination, 169–74 dismembering families, 171–73 encouraging one family form and discouraging all others, 173–74 medicalising procreation, 169–71 non-traditional families and ART, 171–73 procreation by same-sex couples and single persons, 170–74 provider discrimination in infertility treatment, 170 same-sex couples: ART, 170–74 creating families and deductible expenses, 159–60, 172–74 medical expenses coverage in Canada, 192 surrogacy, 170 single people and ART, 170–74 surrogacy, 96, 168, 170, 171–73 section 213 of US Internal Revenue Code, 160–61 corporealising the economic unit into the ‘body family’, 161, 166–69 no deduction for use of surrogate by fertile father, 171–73 unmarried heterosexual couples and ART, 172–74 see also family in tax policy distribution effects of tax deductions, 258–62 see also indirect discrimination in German tax law domination, furthering see under dismembering families Domínguez, Mónica, 114–16 Durkheim, DE, 39, 40 economic disparities between men and women, 278–80 egalitarian views, 280–81, 284 Ehrensaft, Diane, 171 Emery v Canada (2004), 247 employer-provided pension plans see indirect discrimination in German tax law England see United Kingdom (UK) Estate of Slater v Commissioner (1962), 164 European Commission: equal opportunities, 110–11 HETUS, 111, 114 European Court of Justice, 81, 270 European Union/Europe, 20 asymmetrical participation in European labour market, 112–16 gender equality and tax, 75, 110–11 German anti-discrimination laws, 229, 268 joint taxation, 81 same-sex partnerships and marriage, 228 296 Index unpaid work, 114–16, 132 women having heavier loads, 114–16, 132 evasion see tax evasion family in tax policy see child benefits and child-related tax deductions; dismembering families; joint taxation and income splitting in Germany; same-sex partnerships, taxing family splitting, 226–27, 229 family structures see dismembering families family unit, 15, 258 family tax unit, 14, 117, 162, 236 Henry Tax Review, and, 59, 62 indirect discrimination, 110 tax/benefit unit and family taxation, 81–83 see also tax units FCT v Everett (1980), 61 feminist/women’s liberation movement, 24–25, 79 Fernandez (1946), 26 Figari, F, 203 financial crisis, 1, 283 financial decisions and gender see under capital gains taxation and gender Finland: child benefits as universal system, 199 unpaid work, 114 First World War, 199 France: child benefits, 195, 198 data on taxpayers’ work, 121 family splitting, 226 family taxation and tax law theories and policies, 81–83 tax law and social law as regulatory instruments, 199 income splitting, 82 Fraser, Nancy, 249 Freud, S, 40 Gálvez, Lina, 114–16 gay and lesbian community: in Canada, 179–82 earnings, 180–82 relationships see same-sex relationships and surrogacy, 170 see also dismembering families taxation see same-sex partnerships, taxing gay rights movement, 191 gender and financial decisions see under capital gains taxation and gender gender and sex, 276–77 gender, financial constellation and worldviews, 284–85 interplay of sex/gender, worldviews, attitudes and financial behaviour, 280–85 gender, financial constellation and worldviews: tentative analysis, 284–85 sex/gender and the financial constellation, 282–84 worldviews: individualism versus connectedness, 280–81 gender and taxation: Australia see gender equity in Australia’s tax system Kenya see gender and taxation in Kenya United Kingdom see tax, gender and the new institutionalism see also women in law and fiscal policy gender and taxation in Kenya, 4–5, 135–55 impact of taxation policies on men and women, 135–36 objectives of taxation, 135 overview of socio-demographic and expenditure profiles of men and women, 136–38 employment dominated by men, 137–38, 140 tax structure, tax reforms and implications for gender equity, 138–43 filing of income tax returns and gender bias, 139–40 income tax reforms and implications for gender equity, 138–43, 154 marital unit for tax/separation of income between spouses, 139–40 structure of personal income tax, 138–41 structure of VAT, 141–43 tax exemptions, allowances and reliefs, 140–41 tax reform implications for gender equality, 142–43 VAT reforms, 142–43, 154 VAT incidence analysis/distribution of tax burden across individuals, 143–54 food consumption/expenditure, 146–50, 154 non-food consumption/expenditure, 146–47, 150–54 rationalization of VAT rates to reduce regressivity, 143–44 see also structural choices in tax policy design gender equality: Australia see gender equity in Australia’s tax system Germany see under Germany income splitting, and see income splitting and gender equality see also gendering the fiscal state Index 297 gender equity in Australia’s tax system, 3, 53–70, 218 capabilities: capabilities approach in Henry Tax Review, 53 capabilities, care and the tax-transfer unit, 58–64 care, and, 57–58, 64 equity in capabilities, 55–56 and gender equity, 69–70 meaning of capabilities, 55–56 role of society in fostering, 56 and savings, 64–69 women’s capabilities, 56–58 capabilities, care and the tax-transfer unit, 58–64 debate about unit of assessment, 53–54, 58 dependency tax off-sets, 58–59 income splitting, 61 individual tax unit, 58–61, 69 joint transfer unit, 61–64, 69 efficiency and equity, 54–55 gender, and, 55 equity in capabilities, 55–56 Henry Tax Review, 53 Architecture Paper, 53, 55, 63 Consultation Paper, 53 Final Report, 53 part time work, 59, 63–64, 70 policy of encouraging mothers into parttime work, 63–64 savings and capabilities, 55, 64–69 comprehensive/Shanz-Haig-Simons income tax, 65 home ownership, 65, 67–69 income tax concessions and savings, 65–69 part-time work, and, 64 retirement savings, 65, 67, 69 women’s wealth and assets, 65, 66 tax transfer system, 53–54 capabilities approach, and, 56 capabilities, care and the tax-transfer unit, 58–64 principles for analysis of gender equity, 57–58 taxes and government, 54 women’s capabilities, 56–58 individual capabilities, 58 issue of care, 57–58, 64 limits on individual agency, 57 long term impact of decisions, 58 part-time work, and, 63–64 principles for analysis of gender equity, 57–58 see also gendering the fiscal state; savings, wealth and capital gains gender essentialism, 276–78 gender neutral categories, effects of using, 14, 26, 29 gendering the fiscal state see gender equity in Australia’s tax system; tax, gender and the new institutionalism; tax law theories and policies from a gender perspective; women in law and fiscal policy Germany: CEDAW Convention, and, 228–29 children: child benefits/support see under child benefits and child-related tax deductions provision and financing of child care, 201, 217, 218, 219–20, 226 workforce absences and childcare, 256 discrimination see indirect discrimination in German tax law east German areas compared with west German: attitudes, 217 structural differences in families, 218 wages, 218 East German policy compared with West German, 216, 217 European Union and anti-discrimination laws, 229, 268 family policy, 198–203, 226 birth rate, 229 childcare expense reforms 1996: untaxed minimums and deductions, 199–200 family taxation and tax law theories and policies, 81–83 focus on, 219 historical background, 198–99 incentivizing maternal employment through tax law, 200 income splitting as, 218 policy in 1950s, Federal Constitutional Court and income splitting, 215–16 tax deductions for single parents/all parents, employed/unemployed, 200–201 gender equality: constitutional debate, 223–25 constitutional objective, 197, 202, 216 downgrading of gender-equalizing policies, 203–4 ‘educational effects’ of tax legislation, 202, 222 gender equality politics, conflicts governing, 217 gender equality versus general equality, 202–3 individual taxation, and, 224 298 Index inequalities hidden by complex systems and multiple policy goals, 196–97, 209 legal change, and, 228 prohibition of indirect discrimination in tax law, 266–68 see also indirect discrimination in German tax law ‘wrong kinds’ of interpretation of gender equality, 215–16 joint taxation and income splitting see joint taxation and income splitting in Germany marriage: advantages of, 197 concept in German law, 223 constitutional protection, 81–82, 215, 223–24 legal privileges of marriage in Germany not extended to partnerships, 221 marriage-related tax deductions see joint taxation and income splitting in Germany protected by the German Constitution, 81–82, 215, 221 Nazi regime family policies, 198–99 part time work, 217, 219, 222, 261 pensions see under indirect discrimination in German tax law principle of tax fairness, 203, 223, 225–26 social assistance/security: contributions, 256, 258 interdependence of taxation and other areas of law, 222–23 unpaid work, 224 women’s participation in labour market, 112 Giddens, Anthony, 37–38, 47 Gilligan, Carol, 285 Grbich, JE, 61 Green v Commissioner (1980), 97 Gunnarson, Åsa, 3–4, 196 Gustafsson, S, 218 Hall, PA, 41–42 Haraway, Donna, 159, 161 Harmonized European Time Use Survey (HETUS), 111, 114 Hayek, Friedrich A, 85–86 Head, John, 78 Henry, Ken, 53 Henry Tax Review (Australia) see under gender equity in Australia’s tax system hierarchist views, 280–81, 284 history of tax law and women’s inequality see women in law and fiscal policy Howard administration in Australia, 62 Howell, M, 29 Iceland, 199 impact of income tax on wage-earning women in Spain, 4, 109–32 asymmetrical participation in European labour market, 112–16 female workforce profile in Spain, 114 women’s participation in labour market, 112 continuance of traditional gendered divisions of labour, 131–32 gender asymmetric income distribution/ differing impacts of income tax, 120–131 gender impact of latest personal income tax reforms, 128–31 impact of income tax changes on women’s labour income, 126–28 gender perspective on budgets, 109–12 indirect discrimination and personal income tax, 110 purpose of income tax policy, 109–10 Spanish tax system general characteristics, 116–20 see also structural choices in tax policy design incentive structures for creation of retirement income, 262–63 see also pensions incentivising intra-household redistribution, 241–42 see also income splitting and gender equality income sharing in couples, 63, 187, 225, 244–45 incentivising intra-household redistribution, 241–42 no requirement to share income/assets in income splitting arrangements, 235 income splitting, assessing the current effects of income splitting, 216–19 Australia, 61 automatic income attribution rules, 61 Canada see under Canada France, 82 gender equality, and see income splitting and gender equality Germany see joint taxation and income splitting in Germany UK, 237 US see under United States (US) see also income tax income splitting and gender equality, 6, 219, 235–50 differentiating forms of income splitting, 235–36 dilemma of income splitting: the Canadian example, 236–40 Index 299 no requirement to share income/assets in income splitting arrangements, 235 real income splitting, 250 what income splitting rules would promote gender equality, 240–50 incentivising intra-household redistribution, 241–42 respecting women’s agency, 243–45 valuing women’s unpaid labour, 245–50 see also unpaid work see also joint taxation and income splitting in Germany; savings, wealth and capital gains income tax: Australia see gender equity in Australia’s tax system individualizing see under women in law and fiscal policy Kenya see gender and taxation in Kenya Spain see impact of income tax on wageearning women in Spain Sweden see under Sweden UK see under United Kingdom (UK) US see under United States (US) see also income splitting India, 179 indirect discrimination: Germany see indirect discrimination in German tax law Spain see under impact of income tax on wage-earning women in Spain see also savings, wealth and capital gains indirect discrimination in German tax law, 6, 110, 223–25, 229, 255–72 applying the concept of indirect discrimination in tax law, 268–72 choosing the right group, 268–69 proportionality test, 270–72 reasons justifying financial disadvantages, 269–72 distribution effects of tax deductions, 258–62 gender inequalities and unlawfulness, 255–56 incentive structures for creation of retirement income, 262–63 legal impact assessments, 256, 267 long term consequences of laws governing pension plans, 263–65 prohibition of indirect discrimination in tax law, 266–68 justifying disadvantage, 266–67, 268, 269–72 principle of tax equity, 266 proportionality test, 270–72 tax equity and indirect gender discrimination, 265–66 tax regulations governing employerprovided pension plans, 256–58 indirect taxation see Value Added Taxes (VATs) and other indirect taxation individualist views, 280–81, 284, 286–87 Infanti, Anthony, 5, 6, 99, 103 infertility treatment expenses see dismembering families institutionalism: historical, 41 new institutionalism, 40–42 feminist new institutionalism 49–50 Parsonian, 38–40 see also tax, gender and the new institutionalism Institutionalized Organizations: Formal Structure as Myth and Organization (Meyer and Rowan), 40–41 inter-spousal transfers: formalistic transfers, addressing, 243–44 intra-household redistribution, incentivizing, 241–42 respecting women’s agency, 243–45 unpaid caregiving work, and, 249 see also income splitting and gender equality Ireland: child benefits as universal system, 199 regressive nature of VAT, 144 women in the labour market, 112 Italy: leisure time for women, 116 tax law and social law as regulatory instruments, 199 unpaid work, 114–16 Jenkins v Commissioner (1983), 164 Jenson, Jane, 44 joint taxation/filing: academic objections to, 237, 239–40 Germany see joint taxation and income splitting in Germany US joint filing/marital aggregation see under United States (US) see also women in law and fiscal policy joint taxation and income splitting in Germany, 6, 82, 213–29 assessing the current effects of income splitting, 216–19 ineligible families, 218–19 controversial nature of joint taxation/ income splitting, 213–15 current criticisms, 219–25 constitutional debate, 223–25 indirect discrimination, 223 gendered impact of income splitting, 219–20 300 Index interdependence of taxation and other areas of law, 222–23 parental benefits, 219, 226 unmarried partners and same-sex partnerships, 220–21 family policy in 1950s, Federal constitutional Court and income splitting, 215–16 history, effects and the legal debate, 214–15 policy alternatives, 225–27 family splitting, 226–27, 229 individual taxation, 225–26 same-sex couples not permitted to choose income splitting, 213, 218–19, 220–21, 225 strategies for change, 227–29 legal changes promoting gender equality 228 new developments in international law, 228–29 see also family in tax policy; income splitting Julian laws, 16 Katz Commission (South Africa), 143–44 Kenya, 1, child support, 141 income tax and VATs see gender and taxation in Kenya Kenya Integrated Household Budget Survey, 144, 146 unpaid work, 137 Kesselman, JR, 185, 240, 242, 244 Kirchhof, Paul, 203 Klawitter, M, 186 Kornhauser, Majorie, 6–7 Kuchirka (M) v Canada (1991), 246 LaFrance, A, 182 Lahey, Kathleen, 3, 178, 240, 243 Lang, Joachim, 81–82 Law Commission of Canada, 192 leisure time for women, 116 Locke, John, 18 Longtin v R (2004), 247 Maduke Foods Ltd v R (1989), 247 Magdalin v Commissioner (2008), 171–73 marital aggregation see under women in law and fiscal policy marital unit, 14 Roman law, 15, 17 tax unit: development as, 17–19 Kenya see gender and taxation in Kenya marital aggregation overtaxes married women, 19 married couple is the ‘tax unit’, 18–19 objections to, 80 tax/benefit unit and family taxation, 81–83 US see United States (US) see also tax units marriage: aggregation of income/joint filing see under women in law and fiscal policy coverture, doctrine of, 17–19 challenging ‘fiscal coverture’ with individual taxation, 20–21 Germany see under Germany marriage-related tax benefits see income splitting and gender equality promotion of marriage: of heterosexual marriage, 16, 26, 174 by income splitting, 26 by medical expenses deduction in US, 174 by tax advantages in Germany, 198 same-sex, in Canada, 177, 186–90 taxation, and see same-sex partnerships, taxing US Federal law refusing recognition to, 160 whether shifts the costs of children to families, 186–90 as unit of taxation see under marital unit medical expenses deductions see dismembering families Meyer, JW, 40–41 Moorhead, R, 43 Morgan v Canada (2007), 247 Mumford, Ann, Munger, F, 43 mutuality provisions, 184–86, 192 National Bureau of Economic Research (US), 27 National Health Service (UK), 47 National Institute of Statistics (Spain), 121 Neofunctionalism and After (Alexander), 40 Neuman v Minister of National Revenue (1998), 237–38 new institutionalism see tax, gender and the new institutionalism New Zealand, 144 North Coast Women’s Medical Care Group v Superior Court (2008), 170 North, Douglass, 41–42, 43 Norway: child benefits as universal system, 199 leisure time for women, 116 unpaid work, 114 Nussbaum, Martha, 56–58, 64, 116 Index 301 O’Donnell Review (UK), 45 O’Donoghue, C, 203 OECD: countries, 54 joint taxation, 80 revenues, 83–84 German tax law, 228 Old Colony Trust Company v Commissioner (1929), 164 Oppian laws, 16 organizational theory, 46–47 Parsons, Talcott, 38–40, 41, 49 part time work, 79, 279 fairness in taxation, and, 81 Germany, 217, 219, 222, 261 Henry Tax Review, and, 59, 63–64, 70 Spain, 122 partially retrospective legislation, 44–45 Pateman, Carole, 79 Paterson, David A, 105 pensions: income splitting, and see under Canada pension plans and tax deductions see indirect discrimination in German tax law personal income and VATs see gender and taxation in Kenya; Value Added Taxes (VATs) and other indirect taxation Peters, BG, 39 Philipps, Lisa, 6, 61, 89, 101, 164, 197, 219 Pierson, P, 46 Poe v Seaborn (1930), 24 politics of income splitting, gender, 25–27 primary carers: encouraging mothers into part-time work, 63–64 women as, 3, 64 Prince v Canada (2000), 247 procreation: medical expenses as financial barrier for non-traditional families, 174 medicalising, 169–71 see also dismembering families; surrogacy, taxing progressive taxes, 145 proportional taxes, 145 proportionality test, 270–72 public/private divide in taxation see under tax law theories and policies from a gender perspective race and immigration status: discrimination in Nazi Germany tax/social policies, 198–99 as marginalizing characteristics, 27 wealth, 278 worldviews, and, 284 rational choice theory, 38 Rees, R, 62 regressive taxes, 143, 145 retrospective legislation, partially, 44–45 Rodríguez, Paula, 114–16 Roman tax law, 15–16 Rowan, B, 40–41 Royal Commission on the Status of Women (Canada), 236 Royal Commission on Taxation (Canada), 236 Russia, 116 same-sex partnerships, taxing, 5, 236 Australian tax-transfer system, couples in, 63 Canada, 177–92 advantages of legal recognition of same-sex partnerships, 177–78 benefits of dependency, 183–84 disadvantages of legal recognition of same-sex partnerships, 178, 191 diverse economic experiences of gays and lesbians, 178 few tax consequences from recognition, 178 low/middle income and single parents at risk of losing benefits, 178 mutuality provisions, 184–86, 192 profile of gay and lesbian community, 179–82 social assistance, 190–91 whether same-sex marriage shifts costs of children to families, 186–90, 192 creating families and deductible expenses, 159–60, 172–74 Germany, income splitting not permitted in, 213, 218–19, 220–21, 225 US Federal law refusing recognition to same-sex marriages, 160 see also family in tax policy same-sex relationships: ART, 170–74 Canada, recognition in, 177 cohabitee in same-sex relationship in Germany not a ‘real’ single parent, 201 European Union proposals, 228 Germany, legal recognition of partnerships in, 220 marriage see under marriage more egalitarian relationships than heterosexuals, 184 provider discrimination in infertility treatment, 170 and surrogacy, 170 taxation see same-sex partnerships, taxing 302 Index Sauvé v R (2007), 247 savings, wealth and capital gains see capital gains taxation and gender; income splitting and gender equality; indirect discrimination in German tax law; see under gender equity in Australia’s tax system Scandinavia, 62, 280 Scheiwe, Kirsten, 2, 5–6, 82, 223 Schmitter, PC, 40 Schnurr v R (2004), 247 Schoenheit v Frankfurt/M (2003), 270 Schuetze, Herbert, 241–42, 248 Schumpeter, JA, 42, 49 Second World War, 82, 199, 216 tax, gender and the new institutionalism, 38, 45 women in law and fiscal policy, 19, 21, 22, 24 Sedelnick Estate v Minister of National Revenue (1986), 246 Selznick, Philip, 46–47 Sen, Amartya, 53, 55–56, 57, 64, 116 Seron, C, 43 sex and gender see gender and sex social assistance/security, 29 Canada, 78, 190–91 retraction of benefits from partnered gays, 192 contributions, 83–85 Germany: contributions, 256, 258 interdependence of taxation and other areas of law, 222–23 income cut-offs, 27 non-reporting of surrogacy payments, and, 101–2 progressive and regressive taxes, as, 204 Sweden, 21, 84–87, 88 UK, 21 encouraging women to ‘resist’ a life on benefits, 45–46 US, 78 social justice, Canada, 109 economic growth before social justice: a disadvantage for gender equality, 85–87 historically, 14 partial theory of social justice for women, 56–58 redistributive objectives, 85 Sweden, 85–87 tax equity, and, 78–79 Society for Assisted Reproductive Technology (SART) (US), 98–99 South Africa tax reform, 143–44 Spain, capital gains, 118, 120 leisure time for women, 116 part time work, 122 income tax, 116–20 compulsory joint taxation unconstitutional, 117, 129 dominance of labour income, 118–20 family unit tax returns, 110, 117–18 personal income tax, 117–18 tax reform, 116–17 women, and see impact of income tax on wage-earning women in Spain unpaid work, 114–16 women’s participation in labour market, 112 Spangenburg, Ulrike, 2, 6, 99, 196 Staudt, Nancy, 89, 101 Steinmo, S, 41–42, 49 Stephens, M, 241 Stewart, Miranda, 3, 4, 218 structural choices in tax policy design see gender and taxation in Kenya; impact of income tax on wage-earning women in Spain; surrogacy, taxing structuration theory, 47 Surrey, Stanley, 25–27 surrogacy, taxing, 4, 95–107 advantages of reporting, 101, 104–5 bringing surrogacy out of the shadows, 106–7 complying with a surrogacy tax, 105–6 costs associated with surrogacy as medical expenses, 96, 168, 171–73 implications of taxing surrogacy or not, 100–5 economic and behavioural implications, 100–3 social and cultural implications, 103–5 overview of applicable US income tax law, 96–98 broad definition of income includes any surrogacy receipts, 96–97 deductions not permitted, 99 gift laws applicability, 98 nature of the business, 97 personal injury damages inapplicable, 97–98 state policies on surrogacy, 96, 170 surrogacy taxable whether or not legal in US, 95 payments to surrogates representing small revenue loss, 101 profile of surrogates, 104 Index 303 reporting and non-reporting of surrogacy income, 98–100 SART data, 98–99 surrogate views, 99–100 see also structural choices in tax policy design Sutherland, H, 203 Sweden: child benefit, 62, 88 as universal system, 199 combination strategy, 88 employment strategy, 88 dual earner families as a norm, 227 income tax: ability to pay principle, 83, 85–86 early income tax laws, 18 gender equality objectives, 83, 88–89 gender inequalities persist, 89 individualized tax system, 21, 30, 80, 83, 227–28 joint couple-based tax and benefit measures, 28 joint filing, 21 Inland Revenue report on tax policy, 76 leisure time for women, 116 marital aggregation overtaxes women, 19 social assistance/security, 21, 84–87, 88 social justice: economic growth and gender equality, 85–87 and tax reform, 85–87 tax law theories and policies see tax law theories and policies tax ratio, 84 tax reform, 85–87 unpaid work, 88, 114–16 Taylor, RCR, 41 tax avoidance: definitions leading to, 44 income splitting, 237–38, 241, 243–44 discouraging payment for family work services, 246 whether transferee true owner of transferred property, 243 Pre-Budget Report in UK, and, 44 tax avoidance rules as deterrents, 244 VAT in Kenya, 142 tax data: gender-disaggregated data, 99 lack of in surrogacy arrangements, 99 tax deductions: childcare expenses see child benefits and child-related tax deductions distribution effects of, 258–62 gender disadvantages, 268–69 incentive structures for creation of retirement income, 262–63 justifying financial disadvantages, 268–72 proportionality test, 270–72 marriage-related tax deductions see joint taxation and income splitting in Germany medical expenses see dismembering families no deduction for use of surrogate by fertile father, 171–73 payments to family members for services in Canada, 246–49 pension plans, and see indirect discrimination in German tax law promotion of marriage by in US, 174, 198 single parents/all parents, employed/ unemployed in Germany, 200–201 surrogacy, 99 tax equity and social justice, 78–79 tax evasion: financial crisis, VAT in Kenya, 142 tax, gender and the new institutionalism, 3, 37–50 New Labour tax law and policy changes, 37, 38, 42 changes to finance administration arrangements, 45 child benefits, Legal Aid, 43 partially retrospective legislation, 44–45 Pre-Budget report, 44 tax law, 43–47 Working Families’ Tax Credit, 42 ‘rematerialized’ new institutionalist approach and tax law, 42–50 feminist new institutionalism 49–50 games and gender, 45–47 games, gender and institutions, 47–50 influence of Gordon Brown, 43 Inland Revenue/Customs and Excise role, 45–46, 47–48, 50 interactive approach and imbalances in power, 48 new period of gamespersonship: rules and structures, 44–50 tax institutions and gender equality, 37 what is the ‘new institutionalism’, 38–42 importance on new institutionalist approach, 43 new institutionalism, 40–42 ‘old’ institutionalism, 38–40 see also gendering the fiscal state tax law theories and policies from a gender perspective, 3–4, 75–89 dichotomy between paid and unpaid work, 87–89 gender inequalities persist, 89 304 Index impact of public/private divide on tax law, 79–87 economic growth before social justice: a disadvantage for gender equality, 85–87 tax bases and quotas, 83–85 tax/benefit unit and family taxation, 81–83 need for critical epistemology based on gender perspective, 76–79 matter for the private sphere, 77–78 matter of tax equity and social justice, 78–79 see also gendering the fiscal state; impact of income tax on wage-earning women in Spain tax quotas and bases, 83–85 see also structural choices in tax policy design tax units, 14 couples in Australia, 61–64 individual taxation, 20, 80 Australia see under gender equity in Australia’s tax system Sweden see under Sweden UK see under United Kingdom (UK) US see under United States (US) family tax unit see under family unit marital tax unit see under marital unit Roman law, 15–16 tax/benefit unit and family taxation, 81–83 taxation: capital gains tax see capital gains taxation and gender bases and rates see structural choices in tax policy design family, and see family in tax policy gendering the fiscal state see gendering the fiscal state historical nature see under women in law and fiscal policy income tax see income tax savings, wealth and capital gains see savings, wealth and capital gains structural choices in tax policy design see structural choices in tax policy design Teubner, G, 42 traditional and non-traditional families: Germany see Germany United States and medical expenses see under United States Tyazhelnikova, V, 116 United Kingdom (UK), child benefit/support, tax deductions for childcare expenses, 201 as universal system, 199 common law coverture from unitas personae doctrine, 17–18 erosion of doctrine, 18–19 gay and lesbian community, 181 economic mutuality, 186 income splitting, anti-avoidance rules, 237 income tax: development of income tax law, 19, 20 earned income tax credits reinstating aggregation, 20–21 individualizing income taxation, 20–21, 30, 241 inter-spousal transfers, 241 joint couple-based tax and benefit measures, 28 switch from joint to individual taxation, 241 tax and gender see tax, gender and the new institutionalism Inland Revenue and Customs and Excise merger, 45–46, 47–48, 50 inter-spousal transfers, 244 marital aggregation overtaxes women, 19 married couple as basic unit of taxation, 17–18 social assistance/security, 21 encouraging women to ‘resist’ a life on benefits, 45–46 tax and gender see tax, gender and the new institutionalism women’s participation in labour market, 112 United Nations: CEDAW and CEDAW Convention, 228–29 Gender-related Development Index (GDI), 12 Human Development Index (HDI), 12 Platform for Action at Beijing world conference, 12 United States (US): capital gains, 285–86, 288 US rate preference, 96 children and tax, 162, 266 communitarian values seen as feminine values, 285 community property, 23–26 economic disparities between men and women, 278–79 gay and lesbian community, 181 income splitting, 22–23, 164, 165, 216 eliminating, effects of, 27 gender politics of income splitting, 25–27 individual taxation versus marital aggregation with income splitting, 23 negative effects on women, 26–27 income tax: definition of income, 96 Index 305 exclusion of damage awards for personal injury, 97 gifts, 98 income splitting, 22–23, 25–27, 164, 165 income tax law, 96–97 individual income taxation, 22–23 individual taxation and marital aggregation, 21–27 ‘kiddie tax’, 162 marital unit for tax purposes, 162, 165 medical expenses deductions see dismembering families same-sex marriage and tax revenues, 178 surrogacy, and see surrogacy, taxing joint filing: marital aggregation within individual taxation, 21–27, 30, 162, 164 gender politics of income splitting, 25–27 individual income taxation, 22–23 individual taxation versus marital aggregation with income splitting, 23 influence of joint filing, 21–22 joint filing overtaxes married women, 24–25 local government, 41 medical expenses deductions see dismembering families National Bureau of Economic Research, 27 Parsonian institutionalism, 39 same-sex relationships: economic mutuality, 186 gay and lesbian community, 181 marriages and Federal law, 160 more egalitarian relationships than heterosexuals, 184 slavery, 104 social assistance/security, 78 sterilization of women, unconstitutional, 104 surrogacy see surrogacy, taxing tax reform, 85 traditional and non-traditional families see dismembering families unpaid work, 26 worldviews, 280–81 units of taxation see tax units universal market engagement, 2, unpaid work: Canada, 11–12 employed male/female lawyers compared, 13 caregiver subsidies, 249 dichotomy between paid and unpaid work, 87–89 Europe, 114–16, 132 Finland, 114 gendered division, 2, 48, 224 Germany, 224 income splitting, and, 245–50 Italy, 114–16 Kenya, 137 non-taxation of unpaid work creating biases against women’s paid work, 27 Norway, 114 Spain, 114–16 Sweden, 88, 114–16 taxation coordinating relationship between paid/unpaid marketplace, 46 unpaid work poorly compensated in the paid marketplace, 48 taxing/valuing unpaid work, 48, 81, 88–89 causing work to become tax-preferred, 101 US, encouraged by joint filing, 26 valuing women’s unpaid labour, 245–50 strategies to demarginalize caregiving work, 249–50 unpaid caregiving for children and dependants, 245, 248–50 unpaid market labour, 245–49 women having heavier loads, 28, 38, 81, 88, 111, 235, 249 Europe, 114–16, 132 Value Added Taxes (VATs) and other indirect taxation, 4–5 consumption taxes as regressive, 143 reducing regressivity through exemptions, 143–44 gender issues, and, 110 Kenya see gender and taxation in Kenya Villota, Paloma de, 2, 4, 99, 121 Vollmer, F, 224 von der Leyen, Ursula, 226 Walby, Sylvia, 111 Wall, Richard, 116 Wanjala, Bernadette, 2, 4–5, 110 Ward-Batts, J, 241 Warman, Casey, 2, 5, 101, 182, 201, 249 wealth: economic disparities between men and women, 278–80 men owning more wealth than women, 286, 287 risk, and, 282 transfers intra-household see income splitting and gender equality women’s use of, 285 Welch v Helvering (1933), 164 welfare states, 1, European, 75 gender equality, and, 75–76 306 Index social assistance/security see social assistance/security social welfare triangle, 76, 79, 88–89 tax, and, 48, 50 as part of the welfare programme, 81 tax equity and social justice, 78–79 traditional patterns ending, 47 Were, Maureen, 2, 4–5, 110 Wersig, Maria, 6, 82, 110, 197 Wheatcroft, GSA, 44 Whittington, LA, 178, 184 Williams, Joan, 249 Williams, Patricia, 104 Woolley, Frances, 2, 5, 101, 182, 201, 242, 249 women in law and fiscal policy, 3, 11–30 becoming ‘subjects’ in fiscal policy: the ontological challenge, 27–30 advantages of individualized taxation, 30 focus on gender-neutral categories, 29–30 marginalization of women in fiscal debate, 28–29 reluctance of countries to engage in gender mainstreaming, 28 challenging ‘fiscal coverture’ with individual taxation, 20–21, 28, 30 individualizing income taxation in the UK, 20–21 Sweden’s individualized tax system, 21 fragility of equality gains, 11 fragility of women’s equality in Canada (1985–2009) see under Canada marital aggregation/joint filing: individual taxation versus marital aggregation with income splitting, 23 marriage-based systems perpetuating, 20–21 overtaxes married women, 19, 20 US joint filing: marital aggregation within individual taxation see under United States (US) marital unit becomes the basic unit of taxation, 17–19 marital aggregation overtaxes married women, 19, 20 married couple is the ‘tax unit’, 18–19 masculine ‘capture’ in early law and hierarchizing taxation, 14–17 ‘capture’ of women in early Roman tax law, 15–17 constitutive nature of taxation, 14–15 Roman use of taxation to regulate gender, sexuality, race and class, 16–17 modern family policy, 195 historical background, 198–99 see also gendering the fiscal state women’s agency, respecting, 243–45 women’s liberation/feminist movement, 24–25, 79 women’s participation in European labour market, 112–16, 226 income splitting, and, 216–19 joint taxation, and, 218 World Economic Forum Gender Gap Index, 12 worldviews: gender, financial constellation and worldviews, 284–85 individualism versus connectedness, 280–81 interplay of sex/gender, worldviews, attitudes and financial behaviour, 280–85 risk, competitive and confidence, and, 282–84 women, and, 285, 286–88 see also capital gains taxation and gender Wuermeling, Franz-Joseph, 215–16 Young, Claire, 88, 178, 183, 184–85, 192, 196, 241, 263–65 Zelenak, Lawrence, 240, 245 ... of titles in this series, see ‘Oñati International Series in Law and Society’ link at www.hartpub.co.uk/books/series.asp Challenging Gender Inequality in Tax Policy Making Comparative Perspectives. .. Feminist Perspectives on Contemporary International Law: Between Resistance and Compliance? edited by Sari Kouvo and Zoe Pearson Challenging Gender Inequality in Tax Policy Making: Comparative Perspectives. . .CHALLENGING GENDER INEQUALITY IN TAX POLICY MAKING This volume takes a critical look at the gender of tax policy around the world Contributors based in eight different countries examine the