Paul L. Caron

Friday, October 22, 2021

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Two New Papers By Kleiman And Widiss

This week, Sloan Speck (Colorado; Google Scholar) reviews new works by Ariel Jurow Kleiman (Loyola-L.A.; Google Scholar), Revolutionizing Redistribution: Tax Credits and the American Rescue Plan, 131 Yale L.J. F. __ (2021) and Deborah A. Widiss (Indiana; Google Scholar), Chosen Family, Care, and the Workplace, 131 Yale L.J. F. __ (2021).

Sloan-speckHistorically, the American legal system has struggled to adequately recognize and accommodate individuals’ lived experiences of family and care relationships. Over the last two decades, however, there has been a veritable revolution in legislative, regulatory, and judicial positions regarding “nontraditional” family structures. In many ways, public and private responses to the COVID-19 pandemic accelerated and intensified this shift. In separate essays, Ariel Kleiman and Deborah Widiss explore and evaluate pandemic-era government actions in taxation and workplace leave (respectively) that implicate families and care, situating these most recent changes within larger narratives of social provisioning and asking how these changes should influence future policy. Both authors are optimistic but cautionary: we collectively face a tremendous opportunity to advance and cement more inclusive understandings of family and care. How this opportunity unfolds may establish the American welfare state’s trajectory for years to come.

In Revolutionizing Redistribution, Ariel Kleiman deploys her framework of “fiscal impoverishment” to analyze expansions of the child tax credit (CTC) and earned income tax credit (EITC) enacted by the American Rescue Plan Act (ARPA) in March 2021. For Kleiman, critical to these expansions is the extension of “meaningful cash transfer[s]” to “nonworking families and childless workers.” Under ARPA, families can claim full refunds with respect to the CTC without any earned income, rather than facing the pre-ARPA refundability rate of fifteen cents per dollar of earned income. Whether this refundability policy continues after 2021 is in severe doubt, even if Congress extends the amount of CTC payments. In addition, single workers without claimed dependents can receive a nearly tripled (refundable) EITC benefit. Kleiman describes these changes as “nothing short of revolutionary”—a significant step towards a tax system that “does not leave any low-income taxpayers poorer than where they started.” She advocates making permanent ARPA’s changes to the CTC and EITC, as well as various modifications to increase inclusion under both programs.

In Chosen Family, Care, and the Workplace, Deborah Widiss traces the burgeoning number of state and local laws that guarantee paid leave for workers to care for family members. Widiss highlights an important aspect of this trend: many of these laws apply capacious and flexible definitions of “family” to determine whether leave qualifies for benefits. These expansive definitions “explicitly give workers autonomy to define their own conception of family,” either by recognizing care relationships based on factors such as “significant personal bond[s]” or by applying functional approaches that turn on need and (social) responsibility. Moreover, these laws have important distributional effects: the pandemic-fueled shift to remote and hybrid work disproportionately advantages white-collar and highly skilled workers, who typically earn more. Paid leave laws provide a measure of reciprocal flexibility for in-person workers, who may earn less. By curtailing absence-related firings, these laws also may increase workforce persistence for lower-income workers—an important collateral benefit with distributional implications. Finally, Widiss surveys pandemic-motivated leave legislation at the federal level and recommends permanent intervention that enshrines the most effective parts of various state and local laws.

Read together, the essays by Kleiman and Widiss challenge and reframe rationales of desert in the American welfare state. Kleiman advocates—and long has advocated—persuasively for including childless workers and nonworking families in transfer payment regimes. Widiss’s analysis of state-level responses to the diversity and texture of family relationships illustrates, in part, why status-oriented distinctions fail in the tax context. Workers classified as “single” and “childless” for tax purposes may have care and support obligations—including for children—that the tax system fails to recognize. Indeed, Kleiman posits a hypothetic childless worker (named Abe) who has a child and former spouse and presumably other nuanced social ties. Similarly, “nonworking” families generally are defined narrowly for tax purposes, by reference to formal market labor (an admittedly long-acknowledged infirmity). Widiss shows that rangy networks of care obligations disrupt narrow understandings of labor—just as studies in sociology and history demonstrate that family economies stretch far beyond nuclear bounds. From this perspective, the idea of the “undeserving poor” is a flat trope that has carried far too much policy weight for far too long.

Kleiman and Widiss set similar criteria for extending tax and workplace leave reforms: future legislation should be both permanent and federal (and, of course, appropriately administered and implemented). These criteria are clearly desirable: if the policy is good, it should apply broadly across both time and space. Some qualifications are warranted, however. The diversity of state and local workplace leave laws implies some value in permanent but non-federal solutions, at least while there’s robust policy experimentation. Widiss alludes to concerns that thin federal laws may crowd-out or displace state or municipal efforts—and such concerns may be features, rather than bugs, for opponents of reform. By contrast, non-permanent, federal tax interventions may serve purposes distinct from more (formally) durable reforms. For me, one of the pandemic’s success stories involves the three rounds of economic impact payments in 2020 and 2021. These payments played a major role in poverty relief in 2020—and they may have longer-term benefits as well. One-time cash infusions can change recipients’ economic trajectories, as can periodic lump sums. Comprehensive poverty relief consider these types of discrete payments as well as ongoing day-to-day need.

In conclusion, Kleiman and Widiss each raise critical questions about economic relief in the time of COVID-19, and their insights should guide academics and policymakers in the ongoing transition to a post-pandemic era. Surfacing issues surrounding family and care, and outlining the stakes of these issues, is important work. I hope that Kleiman and Widiss’s efforts lead to positive results as Congress considers these issues this fall.

Here’s the rest of this week’s SSRN Tax Roundup:

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