Taxes can seem far removed from women’s daily struggles; however in reality they play a crucial role not only in distributing wealth and resources, but also in perpetuating sexist gender stereotypes.
One of the major factors in defining women’s time, opportunities and income is their unpaid care work. This includes cooking, cleaning and care of children and the elderly – and also, in many developing countries, collecting water and fuel for domestic use. All over the world, women spend much more time than men on unpaid care, and indeed work longer hours overall when this unpaid work is taken into account. Unpaid care responsibilities profoundly impact women’s ability to take on paid work or pursue economic opportunities, and the types of work they are able to find and do. For many women and girls, their domestic duties also shape their educational opportunities and attainment. Many other important areas of women’s lives and rights are also affected, ranging from health to political participation.
Is this an inequality we are prepared to accept? As many development and human rights actors have argued recently (see Oxfam GB, ActionAid, the Gender & Development Network), tackling the gendered distribution of unpaid care work should actually be a core part of poverty reduction strategies – not to mention progress towards gender equality.
To achieve the change needed, it is certainly necessary to improve access to childcare, public service provision and workplace policies – but also to take a close look at tax systems.
Tax codes and tax policies are stuffed full of implicit and explicit assumptions about women’s role in society. In particular, income tax policies in many countries are based on the idea the men are/should be the breadwinners (and manage the household finances), while women are/should be carers and homemakers. Indeed, tax codes entrench and perpetuate this social arrangement. For example:
- In countries with joint filing systems for couples, many women face a higher marginal tax rate on their first dollar earned than they would do as an individual (because their husband likely earns more than they do – hello, gender pay gap!). Faced with the prospect of low after-tax earnings, many women will decide it makes more financial sense not to enter the labour force at all.
- When two-earner couples are taxed at a higher rate than one-earner couples, this may also be a disincentive to women working (given that the person who stays at home is usually a women, thanks again to pernicious gender stereotypes constraining the choices of both men and women).
- Tax codes that attribute the non-labour income of a wife to her husband: e.g. the profits of a family business may be regarded as his income, regardless of her role in said business.
- Tax exemptions and allowances that are automatically granted to the male spouse.
- Tax allowances that favour households based on a male breadwinner/female carer model over a dual earner/dual carer model. For example, in many countries a taxpayer (implicitly envisaged in male form) can claim allowances for a household member who is financially dependent and contributes unpaid labour – representing a payment for unpaid work that goes to the spouse of the worker herself! These type of provisions may also create disincentives for men taking on more of the unpaid care work in the home – because if two parents split earning and care responsibilities more equally they would no longer be eligible for such support.
Simultaneously, measures on the expenditure side of fiscal policy that cut funding for health, care and social security (such as austerity measures) often increase women’s unpaid care work, as they step in to fill unavoidable care needs (for the sick, elderly, disabled people, or children) that the State will no longer meet. To politicians and policy-makers, women’s unpaid labour appears to be a cost-free, limitless resource – when in reality women have to make major sacrifices in order to increase their workload in the home, often at the expense of their health or financial security. (Meanwhile, serious measures to tackle tax evasion, close tax avoidance loopholes or raise taxes on the most wealthy could prevent the need for these cuts altogether.)
Tax systems do not exist in a vacuum. They embody and entrench all sorts of social norms and expectations. Some of these may be of social value: higher taxes on cigarettes, alcohol, or carbon emissions for example. However, others are profoundly damaging and discriminatory against those who do not conform to traditional family models or gender roles. It doesn’t have to be this way. If tax systems are capable of enshrining outdated gender norms it must be possible to design them to promote new, more egalitarian gender models. (One idea floated recently in the UK is redesigning tax credits to enable a separate work allowance for second earners, thereby encouraging more women in single earner couples to enter the labour market.) As Diane Elson says, the “design of income tax systems should proactively promote an equal sharing of both paid and unpaid work between women and men, not give incentives for the perpetuation of families with breadwinner husbands and dependent wives”.