Social Security

Working Women, Give Up

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The tax code can be seen as "pro-family" in at least one respect: It makes going to work for married women actually cost their families money under some circumstances. That's one conclusion of Taxing Women, a new book by University of Southern California economist Edward J. McCaffery.

For a hypothetical woman whose husband made $15,000 a year, McCaffery found that her taking a full-time job paying $5.00 an hour could actually decrease the couple's overall compensation by $1,450. After she pays her income tax in her husband's tax bracket, Social Security taxes, state and local taxes, and typical child care and work-related expenses, and loses the earned-income tax credit, she's working for less than nothing.

While conservatives might suggest that this just means the little lady should stay home as tradition intends, McCaffery argues that this perverse tax incentive means that "for poor women, being married often makes little financial sense, and unfortunately, that includes many women with children." Which means the tax code, like welfare, can be one more way the government discourages family formation among the poor.