Wednesday, November 30, 2022
James M. Puckett (Penn State-University Park; Google Scholar), Facing the Sunset: An Egalitarian Approach against Taxing Couples as a Unit, 55 Loy. L. A. L. Rev. 477 (2022):
With the sunset of marriage penalty relief in 2025, Congress has a bittersweet opportunity to align the taxable unit with the guiding norm of taxation according to “ability to pay.” The federal income tax brackets have been designed around a misguided and poorly targeted assumption that comparing married couples is appropriate, whether because of pooling income, economies of scale, or untaxed housework and caregiving. This Article argues that the individual, rather than (married) couples, should emerge as the unit for income taxation under an egalitarian approach to distributive justice.
Welfarist insights and egalitarian arguments sometimes align on solutions to tax policy questions. But the precise lens through which one views questions of distributive justice can make a difference in thinking about the taxable unit. A welfarist approach, in this context, opens the door to inequality through bonuses that depend on marriage or relationships. Although no perspective has an easy time with couple’s penalties, an egalitarian perspective more persuasively rejects taxing phantom income (especially in a tax system resembling the one that we have).
This Article echoes prior calls for the end of the joint return. Although not necessarily theoretically tidy, distinct solutions are likely to be necessary to balance the importance of preventing abuse by related parties and to account for non-business deductions and credits. Realistically, then, it will likely be necessary to blur the lines between individual taxpayers for some—but not all—purposes. This Article points to workable options for accomplishing this balancing while avoiding disproportionate benefit for high-income taxpayers.