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 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
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
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 .............................................................................................. 1 Lisa Philipps, Kim Brooks, Åsa Gunnarsson and Maria Wersig Part I: Gendering the Fiscal State 1. The ‘Capture’ of Women in Law and Fiscal Policy: The Tax/Benefit Unit, Gender Equality, and Feminist Ontologies ..... 11 Kathleen A Lahey 2. Tax, Markets, Gender and the New Institutionalism........................ 37 Ann Mumford 3. Gender Equity in Australia’s Tax System: A Capabilities Approach ......................................................................................... 53 Miranda Stewart 4. 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 5. Taxing Surrogacy ............................................................................. 95 Bridget J Crawford 6. A Gender Perspective Approach Regarding the Impact of Income Tax on Wage-earning Women in Spain .......................... 109 Paloma de Villota 7. 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 8. Dismembering Families .................................................................. 159 Anthony C Infanti 9. 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 email@example.com. 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
List of Contributors
gendered aspects of taxation. Among her recent publications is a chapter in another Hart publication: ‘Remembering the “Forgotten Man” (and Woman): Hidden Taxes and the 1936 Election’ in J Tiley (ed), Studies in the History of Tax Law: Volume 4 (Hart Publishing, 2010). Kathleen A Lahey is Professor of Law and Queen’s National Scholar, Faculty of Law, Queen’s University, and co-director, Feminist Legal Studies Queen’s. Her research includes corporate, personal, international, and comparative taxation and policy, property law, gender budgeting, women, sexualities, and race in fiscal policy and human rights. Recent publications include Women and Fiscal Equality (special edition, Canadian Journal of Women and the Law, 2010), ‘Women, Substantive Equality, and Fiscal Policy’ (CJWL, 2010), and ‘International Transactions, Taxation, and Women: The Critical Role of Gender Analysis’ (UBCLRev, 2010). She frequently advises parliamentary committees, policy units, and the media on tax/budget issues. Email: firstname.lastname@example.org. Dr Ann Mumford is a Senior Lecturer in the School of Law at Queen Mary, University of London. Ann’s research interests are in the fields of fiscal sociology, budgetary processes, and the intersections of law, gender and equality. She has written two monographs, Taxing Culture (Ashgate, 2002); and Tax Policy, Women and the Law (Cambridge University Press, 2010). Lisa Philipps is a Professor at Osgoode Hall Law School of York University in Toronto, Canada. She is co-editor of Tax Expenditures: State of the Art, ed Lisa Philipps, Neil Brooks and Jinyan Li (Toronto, Canadian Tax Foundation, 2011), and co-author of David G Duff, Kim Brooks, Benjamin Alarie and Lisa Philipps, Canadian Income Tax Law, 3rd edn (Markham, Ontario, LexisNexis, 2009). Kirsten Scheiwe is Professor of Law at Hildesheim University, Germany since 2000. She works mainly in the areas of family law, social law and legal comparison and investigates law in social context from the perspectives of interdisciplinary and comparative legal analysis and gender studies. She received her PhD from the European University Institute, Florence and her habilitation from Frankfurt University. Ulrike Spangenberg is a Berlin-based independent consultant who has worked with clients in government, trade unions and a variety of other organisations. A lawyer by training, she has specialized in Gender and Fiscal policy. She is the author and co-author of several key studies on the intersection of taxation and gender in Germany. Contact: spangenberg@ gleichstellungsinstitut.de.
List of Contributors
Miranda Stewart is an Associate Professor at Melbourne Law School, University of Melbourne. She recently edited Housing and Tax Policy (Australian Tax Research Foundation, 2010) and is a co-author of Death and Taxes (Thomson, 2009) and Income Taxation: Commentary and Materials (Thomson, 2009). She is currently researching taxation of the not-for-profit-sector and issues in tax and development. Bernadette Wanjala is a PhD Fellow in Economics at the Development Research Institute, Tilburg University, the Netherlands. She has wide research experience and publications in macroeconomics, macro modelling, development economics and gender aware macroeconomics. She has previously worked as an Assistant Policy Analyst in Macroeconomics Division, The Kenya Institute for Public Policy Research and Analysis (KIPPRA). Casey Warman received his PhD in Economics from Carleton University in 2006. He teaches in the Economics Department at Queen’s University. His research interests primarily involve empirical issues in the areas of immigration, gender differentials, labour market, and health economics. His research has been published in the Canadian Journal of Economics, Labour Economics and the American Economic Journal: Economic Policy. Maureen Were is a researcher at the Research and Policy Analysis Department of the Central Bank of Kenya. She holds a PhD in economics, with wide experience in economic research and the field of macroeconomic modelling. She has written a number of papers on pertinent macro and socio-economic issues relating to Kenya. Maria Wersig studied law and gender equality at the Freie Universität Berlin. She has worked as a policy adviser within the Parliament of the Federal Republic of Germany and is currently a doctoral candidate at the Otto-Suhr-Institute of Political Science (Berlin). Her research interests include family law and policy, taxation, legal gender studies and comparative constitutional studies. Frances Woolley is a Professor in the Department of Economics at Carleton University. Her area of expertise is the economics of the family and public policy, particularly with respect to the tax treatment of families. She blogs regularly at Worthwhile Canadian Initiative, http://worthwhile.typepad.com and for the Globe and Mail newspaper.
Introduction LISA PHILIPPS, KIM BROOKS, ÅSA GUNNARSSON AND MARIA WERSIG
HE GENDERED DESIGN and implications of many areas of law, economics and political science have been subject to robust, thoughtful, detailed analysis and critique. While a gender analysis of tax policy exists, its contours have not been explored with the same degree of scrutiny and a gender analysis of much public policy in the tax area is missing altogether. This book begins to fill a critical gap by focusing on the profound effects that gender norms and practices have had in shaping tax law and policy in different countries, and how taxation in turn impacts upon the possibilities for equality along gender, race, class, sexuality and other lines. The chapters explore questions about how the gendered fiscal state might be theorized, how structural choices in tax policy design contribute to gender inequality, how tax policy affects family configurations and perceptions of what constitutes family, and how fiscal systems impact savings and wealth accumulation by women and men. 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. Tax policy research in general must increasingly contend with the intertwining of national and international norms and institutions in fiscal governance (Avi-Yonah 2007; Christians 2009; Christians et al 2008; Cockfield 2005 and 2006; Stewart 2003). The power to raise and spend public revenues remains fundamentally associated with the nation state and the research in this volume illustrates the diversity of tax policy choices made historically by different countries. At the same time, states increasingly set their fiscal directions in response to pressures associated with global economic integration, capital mobility and market deregulation. The transnational quality of fiscal policy became even more apparent after 2008 when the worldwide financial crisis led to new multinational commitments to engage in stimulus budgeting and to cooperate in preventing tax evasion. The crisis has also exposed the massive (and massively gendered) social risks that populations face in a world of unstable markets and limited welfare state safety nets, often comprised largely of tax-based programmes. These risks are magnified in many countries
2 Lisa Philipps, Kim Brooks, Åsa Gunnarsson and Maria Wersig by demographic ageing which puts additional pressure on the organizing and financing of care work and reproduction, with enormous implications for the gendered division of paid and unpaid labour. The fiscal deficits resulting from the combination of these pressures will need to be addressed in some fashion. As governments and international bodies grapple with these challenges, tax policy will play a central role both as a means of financing public action, and as a powerful instrument for delivering programmes, distributing resources and incentivizing behavioural changes. Thus, it is not surprising that in the wake of the crisis, scholars and policy makers have begun to analyze how tax systems may have contributed to past problems and how they might be redesigned to foster economic growth, discourage excessive risk taking by market actors and shore up the economic security of vulnerable individuals (Edgar 2010; International Monetary Fund 2009; Shaviro 2009). Yet new tax measures are unlikely to achieve their goals unless the policy makers who design them are attuned to gender differences in income, wealth, opportunities, and responsibilities. The authors in this book draw on a variety of intellectual frameworks to analyze the gender saturated character of tax policy choices. Indeed, the collection demonstrates that gender analysis of tax law can proceed from a range of different theoretical and political perspectives. Most of the contributors make their disciplinary home in law and hence one focus of the book is on feminist legal and socio-legal analyses of specific rules, procedures and institutions of tax law. Many of the chapters shed light on assumptions about gender or sexuality that are embedded in the design of legal norms, or on the differential effect of tax laws when applied to women and men who occupy different positions in markets and households. Others approach the subject from a more economic perspective that analyzes the way taxes incentivize the behavioural choices of men and women as individuals and in various household forms (see especially Paloma de Villota, chapter six; and Casey Warman and Frances Woolley, chapter nine). Other important intellectual backdrops include feminist scholarship on welfare states and on the gendered implications of neoliberal economic policy. For example, some chapters investigate the tax dimensions of a broad shift away from policies that assume two-parent households supported by a primary breadwinner, towards a system modelled on universal market engagement by self-reliant individuals (see, for example Ulrike Spangenburg, chapter thirteen; Kirsten Scheiwe, chapter ten). Finally, this volume adds to a growing academic and policy literature on gender budgeting, most of which has focused on the spending side of fiscal policy (as discussed by Bernadette Wanjala and Maureen Were in chapter seven). One of its important contributions is to illustrate how gender analysis can be applied more systematically to the revenue side of budgets. Fortunately, we were not required to start our analysis from scratch. While there is much to be added to the gender analysis of fiscal policy, the
Introduction 3 authors in this collection were able to build on earlier path-breaking work by feminist scholars. In some countries more than others, a feminist tax policy literature is rich and deep, although far from complete (Alstott 1996; Brown 1997; Dulude 1985; Fellows 1998; Kahng 2004; Lahey 1985; Lipman 2003; Mennel 1986; Mückenberger et al 2007; Philipps 1996; Shurtz 1998; Staudt 1996; Stewart 1998; Young 1995). Although some jurisdictions have been fortunate to have several scholars working in the area, no jurisdiction has policy makers that have fully engaged with their suggestions. Each of the four chapters included in Part I: Gendering the Fiscal State offers a perspective on the role of gender in defining the overall frame within which tax policy debates are played out. Though anchored by case studies of tax reform in particular locations and at particular times, their purpose is not to develop detailed policy prescriptions. Rather, they serve to enable critical analysis by revealing how apparently gender neutral tax regimes can be implicated in the production and reproduction of unequal gender relations. The first chapter, by Kathleen Lahey, places the subject matter of this book squarely in historical context. Lahey argues that the fundamental source of women’s inequality in tax law is their continuing absence as true subjects of fiscal policy independent of their relationships with men. Indeed, in her view the ‘basic nature and function of the state, of taxation, and of fiscal policy remain grounded in preoccupation with male control over women’ (14). Lahey excavates the profoundly gendered ontology of tax law from pre-Roman times and traces this history to the unstated assumptions that frame contemporary tax policy debate. Ann Mumford and Miranda Stewart (chapters two and three) examine recent processes of tax reform in England and Australia, respectively. Both point out the limited interest that policy makers have demonstrated in gender issues, apart from using taxes to encourage women’s participation in paid labour or to deliver baseline welfare. Other dimensions of gender inequality tend to drop out of the picture, as Stewart discusses in relation to the distribution of opportunities to accumulate capital. A further theme connecting these two chapters is the continued pressure exerted by a market-oriented economic policy paradigm in contemporary tax policy making. Each turns to a broader theoretical approach (new institutionalism for Mumford, development theory on capabilities for Stewart) to open up the analysis of tax systems to a fuller consideration of the issues and constraints that women face as economic actors. The final chapter in Part I by Åsa Gunnarsson (chapter four) emphasizes the pivotal role of the public/private divide in structuring the tax treatment of women as compared with men. Comparing German, French and Swedish approaches to the tax unit, she finds that they offer opposing visions of gender equality as a function of either promoting sameness (universal market participation) or accommodating difference (women as primary carers), with neither fostering the integration of these activities.
4 Lisa Philipps, Kim Brooks, Åsa Gunnarsson and Maria Wersig Gunnarsson also critiques the Swedish tax reforms of 1991 as poorly designed from the perspective of both economic growth and women’s equality. She argues that the concentration of tax cuts on high income men ignored the efficiency gains that could have been reaped by reducing taxes for more women, whose paid labour supply is more responsive to changes in the after-tax wage. Instead, reformers relied on welfare measures to address gender equality concerns, leaving women exposed to welfare walls in the form of high tax back rates on benefits when they start to earn income. On this level, Gunnarsson echoes Stewart’s concern with an exclusive focus on baseline economic security for poor women, as opposed to their broader inclusion in the full range of market opportunities. Following Part I, the book shifts from macro level analysis to closer studies of specific tax policy problems. Many of the remaining chapters address subject matters that have not frequently, or have never, been considered from a feminist perspective. The contributors to Part II on Bases and Rates all provide examples of how gender equality is impacted by decisions about the basic structural design of tax systems. Bridget Crawford’s study (chapter five) probes the meaning of income and considers how taxation of earnings from surrogacy contracts would impact women’s equality. The current IRS practice of loose enforcement in this area appears in an immediate sense to be better for women undertaking an inherently gendered form of economic activity. Yet Crawford argues that taxation is the preferred option, both from the symbolic perspective of validating women’s reproductive activities as ‘work’, and because of the potential indirect benefits that surrogates will obtain by becoming taxpayers. Paloma de Villota (chapter six) widens the analysis of structural tax design by demonstrating the complex interaction of base, rates and tax unit in shaping the gender distribution of personal income taxes in Spain following successive rounds of tax reform. She identifies several potential sources of gender bias because of the different earning profiles of men and women, the differential tax rates applied to wages and capital gains, and the continued option for married persons to file individually or jointly. Similar themes are pursued by Bernadette Wanjala and Maureen Were (chapter seven) in the context of Kenya. Both of these chapters point out the difficulty of thoroughly understanding or explaining the gender impact of tax policies in the absence of fully gender disaggregated tax and economic data. This barrier is particularly acute in countries that use a joint tax return. Nonetheless, both Villota and Wanjala and Were located sufficient data to conduct a partial analysis that provides at least a window onto the gendered impact of tax policies. Wanjala and Were add a further dimension to the picture by studying the incidence of Value Added Tax in Kenya, demonstrating the sometimes surprising effects of decisions to exempt a particular good or service from the tax. Their contribution bears on the question of tax mix and is important not least because
Introduction 5 many countries outside North America rely so heavily on VATs or other consumption taxes to raise a large share of revenues. Wanjala and Were’s study especially illustrates the differences that lie between tax systems in rich and poor countries, and the way gender interacts with other key socioeconomic characteristics of Kenyans, such as the divide between urban and rural populations and between owners and non-owners of land. This opens a very large question that should be on the agenda for future research in this field, that is, how gender analysis of tax policy in individual countries connects to issues of global inequality among more and less wealthy countries. The need for careful attention to demographic diversity is brought into the foreground by Part III on Tax and the Family. These chapters not only interrogate the consequences of fiscal policy for different kinds of families, but question the degree to which fiscal policy constructs the normative family. Anthony Infanti (chapter eight) focuses on the design and effect of the medical expenses deduction in the United States comparing so-called traditional and non-traditional families, but more fundamentally his chapter probes the constitutive nature of taxing legislation using the medical expenses deduction as a foil. Infanti’s chapter throws into relief the ways in which tax policy design can take for granted stereotypes about gender. For example, he demonstrates that the design of the medical expense deduction elides questions about the identity of the recipient of the medical treatment and presupposes particular family configurations, most notably reflecting the view that only heterosexual families procreate. The second chapter in Part III, by Casey Warman and Frances Woolley (chapter nine), turns to the implications of tax policy for same-sex couples. State recognition of same-sex relationships has been a hot button issue in many parts of the world in the last decade: naturally, given that all income tax legislation takes spousal relationships into account in at least some of its provisions, one consequence of legal recognition for same-sex couples is a change in the tax treatment of the individuals in the relationship. Warman and Woolley rely on Canadian data to build a demographic profile of selfidentified gays and lesbians in Canada. They conclude, in contrast to studies undertaken in other jurisdictions, that legal recognition of same-sex marriage has had few tax advantages for working-age gays and lesbians; nevertheless, for single parents, the legal recognition of relationships can lead to a substantial loss of benefits delivered through Canada’s tax legislation. The final two chapters in Part III turn to the gendered consequences of tax design for ‘traditional’ families employing Germany as a case study. Kirsten Scheiwe (chapter ten) details the impact of child benefits and deductions for expenses related to child rearing. The gendered division of work in the home, particularly around the raising of children, is one of the most palpable illustrations of gender inequality, so it is perhaps shocking that this has not been taken into account in any adequate way by fiscal policy makers around the globe. One of the most important contributions
6 Lisa Philipps, Kim Brooks, Åsa Gunnarsson and Maria Wersig Scheiwe’s chapter makes is her insistence that taxation, social security and direct benefits must be analyzed together to present a sophisticated view of the state’s role in providing particular incentives and disincentives for child care work. Scheiwe concludes that Germany’s approach to this area results in highly uneven consequences, some intended and some unintended, across families depending on the family’s form and its income class. Maria Wersig (chapter eleven) concludes Part III of the collection. Wersig’s chapter complements the others in this section—her review of the German system of joint taxation reveals the dominance of the bias toward traditional families identified also in Infanti’s chapter. The chapter includes a historical review of the basis for joint taxation of spouses and she critiques its gendered repercussions. Germany’s constitutional constraints present yet another layer to the complicated story of why Germany continues to tolerate joint taxation when it unequivocally constitutes bad gender politics. Wersig’s appeal for reform might be echoed in other countries where joint taxation and income splitting continue to hold sway in fiscal policy. An area that has been desperately lacking in gender analysis is the consequences of fiscal policy for women’s saving and capital investment; therefore, the collection concludes with Part IV which turns the analytical focus to Savings, Wealth and Capital Gains. Part IV opens with a contribution from Lisa Philipps (chapter twelve). Philipps complicates the narrative that income splitting is always bad for women by focusing on the possibilities for women if income splitting were coupled with a legal requirement that the split income (or the underlying assets) actually be transferred to the lower-income spouse. At its core, Philipps’ argument demands that feminist scholars and policy makers consider whether there are autonomy enhancing moves that could be made in tax policy design if we were serious about wanting to redistribute wealth intra-family. If intra-family transfers present one means of supporting saving and wealth accumulation by women, another mechanism is to offer government support for employer-provided pensions. Ulrike Spangenberg (chapter thirteen) takes on the difficult question of whether tax regulations actually violate constitutional prohibitions against discrimination. She argues that the fact that many vulnerable groups are under-compensated or not covered by government-subsidized employer-provided pensions requires at least some additional compensation for these excluded or under-subsidized groups, otherwise the tax system results in indefensible indirect discrimination. Finally, the collection includes a groundbreaking chapter by Marjorie Kornhauser (chapter fourteen) on the gendered implications of capital gains taxation. Of all forms of income, capital gains receive some of the most favourable tax treatment worldwide. A standard narrative (and an important one) would explore the degree to which that preference benefits primarily men. But Kornhauser goes much beyond that narrative, looking also at the explanatory rationale for the dominance of men as investors in
Introduction 7 capital assets. Kornhauser delves into the behavioural investment tendencies of men and women and queries whether those investment practices exacerbate the gender inequality inherent in the capital gains preference. She provides a more nuanced story about the policy moves governments should make in designing the rules governing capital gains taxation. An active engagement with policy immediately raises the question of which institutions and processes can best be mobilized to challenge and change the status quo, and which may represent barriers which themselves need to be reformed. Read as a group, the chapters in this volume show why legal instruments are essential, yet also limited in their ability to bring about meaningful change on the ground, and this is true even when law makers collaborate through international institutions to create norms such as tax treaties or conventions to eliminate discrimination against women. The book reveals the complementary roles played by different branches of the state, such as treasury officials and women’s bureaus, legislatures and courts, revenue administrators and statistical agencies. It also raises persistent questions about how feminist researchers and civil society advocates can best engage with these institutions and processes to achieve thoughtful policy changes and to evaluate both successes and failures. The collection contributes to the emerging literature that takes seriously the impact of policy making on women. It does not, by any stretch, canvass all of the issues or provide definitive solutions. Instead, we hope it serves as a call for other researchers and policy makers to grapple with the questions it raises, pursuing new lines of inquiry and interrogating fiscal policy for all its consequences, particularly the consequences for those most exposed to market discrimination. REFERENCES Alstott, A (1996) ‘Tax Policy and Feminism: Competing Goals and Institutional Choices’ 96 Columbia Law Review 2001. Avi-Yonah, RS (2007) International Tax as International Law (New York, Cambridge University Press). Brown, DA (1997) ‘Race, Class, and Gender Essentialism in Tax Literature: The Joint Return’ 54(4) Washington and Lee Law Review 1469. Christians, A (2009) ‘Sovereignty, Taxation, and Social Contract’ 18(1) Minnesota Journal of International Law 99. Christians, A, Dean, SA, Ring, D and Rosenzweig, A (2008) ‘Taxation as a Global Socio-Legal Phenomenon’ 14 ILSA Journal of International and Comparative Law. Cockfield, AJ (2005) NAFTA Tax Law and Policy: Resolving the Clash Between Economic and Sovereignty Interests (Toronto, University of Toronto Press). —— (2006) ‘The Rise of the OECD as Informal “World Tax Organization” through National Responses to E-Commerce Tax Challenges’ 9 Yale Journal of Law and Technology 59. Dulude, L (1985) ‘Taxation of the Spouses: A Comparison of Canadian, American, British, French and Swedish Law’ 23 Osgoode Hall Law Journal 1.
8 Lisa Philipps, Kim Brooks, Åsa Gunnarsson and Maria Wersig Edgar, T (2010) ‘Financial Instability, Tax Policy, and the Tax Expenditure Concept 63 Southern Methodist University Law Review 969. Fellows, ML (1998) ‘Rocking the Tax Code: A Case Study of the Tax Treatment of Work-Related Child-Care Expenditures’ 10 Yale Journal of Law and Feminism 307. International Monetary Fund (2009) Debt-Bias and Other Distortions: CrisisRelated Issues in Tax Policy. Available online at: www.imf.org/external/np/pp/ eng/2009/061209.pdf). Kahng, L (2004) ‘Innocent Spouses: A Critique of the New Tax Laws Governing Joint and Several Tax Liability’ 49 Villanova Law Review 261. Lahey, K (1985) ‘The Tax Unit in Income Tax Theory’ in ED Pask et al (eds), Women, the Law, and the Economy (Toronto, Butterworths) 277. Lipman, FJ (2003) ‘Enabling Work for People with Disabilities: A Post-Integrationist Revision of Underutilized Tax Incentives’ 53 American University Law Review 393. Mennel, A (1986) ‘Frauen Steuern Staatsfinanzen’ Feministische Studien 71. Mückenberger, U, Spangenberg, U and Warncke, K (2007) Familienförderung und Gender Mainstreaming im Steuerrecht (Baden-Baden, Nomos). Philipps, L (1996) ‘Discursive Deficits: A Feminist Perspective on the Power of Technical Knowledge in Fiscal Law and Policy’ 11 Canadian Journal of Law and Society 141. Shaviro, D (2009) ‘The 2008–09 Financial Crisis: Implications for Income Tax Reform’, NYU Law and Economics Research Paper No 09-35. Available online at: papers.ssrn.com/sol3/papers.cfm?abstract_id=1442089. Shurtz, N (1998) ‘Critical Tax Theory: Still Not Taken Seriously’ 76 University of North Carolina Law Review 1837. Staudt, NC (1996) ‘Taxing Housework’ 84 Georgetown Law Journal 1571. Stewart, M (2003) ‘Global Trajectories of Tax Reform: The Discourse of Tax Reform in Developing and Transition Countries’ 44 Harvard International Law Journal 139. Woodman, FL (1998) ‘Women and Children in the Economy: Reflections from the Income Tax System’ 47 University of New Brunswick Law Journal 311. Young, CFL (1995) ‘(In)visible Inequalities: Women, Tax and Poverty’ 27 Ottawa Law Review 99–127.
Gendering the Fiscal State
1 The ‘Capture’ of Women in Law and Fiscal Policy: The Tax/Benefit Unit, Gender Equality and Feminist Ontologies KATHLEEN A LAHEY
T IS WELL known that the movement towards gender equality has been contested and slow, and that in no country have women yet attained genuine and full equality with men. Less visible is the fact that equality gains are not just difficult to achieve, but are extremely fragile and can be reversed quickly when the impact of law and policy on women as a sex/gender class is not kept at the forefront of the agenda. Over the last ten years, women in Canada have learned this hard fact. This chapter connects the dramatic erosion of women’s status in Canada in recent years with tax and fiscal policies that reinforce women’s traditional lack of social, economic and political power and disproportionate responsibilities for unpaid and underpaid work. Instead of simply looking for specific policy alternatives to those that currently shape the new status quo, however, this chapter examines how ‘masculine capture’ of governance, revenue and social resources in longer-term processes of state-building has made it possible for women to become formal ‘legal persons’ in some types of legal, social and economic situations, but has continued to prevent women from acting as true and equal ‘subjects’ of the state in the same way that men do. This inquiry traces the ‘capture’ of women reflected in the first recorded law codes and tax practices (from the ancient Middle East and Rome) through the development of continental and English taxation, colonial exportations and contemporary tax policies and posits that until fundamental concepts like value and work are re-visioned around women as equal subjects, women’s equality will remain elusive.
12 Kathleen A Lahey THE FRAGILITY OF WOMEN’S EQUALITY: CANADA, 1985–2009
Women’s equality in Canada received a huge boost when the new Charter of Rights and Freedoms prohibited sex discrimination effective in 1985. This constitutional development was accompanied by tremendous social interest and a huge number of studies, policies and laws enacted to support the promise of equality. The rapid improvement in the status of women was reflected in the UN Human Development Index (HDI) and Gender-related Development Index (GDI) (UNDP). In 1995, Canada was ranked only ninth in the UN’s GDI (HDI: 1990–93 data), but within a few short years rose to first for four years in a row. During this time, Canada adopted the UN Platform for Action at the 1995 Beijing world conference and began actively implementing gender mainstreaming and gender-based analysis. This commitment was short lived. By 2000, budgetary, tax and spending changes had begun to undercut women’s economic equality in Canada. These changes included tightened eligibility for unemployment insurance benefits, maternity leave and parental leave (all implemented in the mid1990s); spending cuts for childcare, privatization of government services, making low-income benefits more ‘target efficient’ by reverting to the ‘male breadwinner’ model of tax and benefit assistance and the shift from social assistance to ‘workfare’. At the same time, tax cuts for high-income business owners and corporations were implemented and, most recently (since 2006), a minority conservative government has expanded the use of joint tax and benefit measures while doing nothing to redress disproportionately high tax rates for those with low incomes. The impact of these changes has been dramatic and highly visible. By 2001, Canada had dropped to third in the UN GDI (reporting on 1999 data) and to seventh in the 2006 GDI (reporting on 2004 data). Newer indices that place less emphasis on general development levels in order to isolate changes in the status of women reveal that this trend has accelerated rapidly since then. The new World Economic Forum Gender Gap Index ranked Canada fourteenth in 2006, eighteenth in 2007 and thirty-first in 2008 (World Economic Forum 2008). In 2009, the UN ranked Canada seventy-fourth in its new gender disparity measure, which ranks countries by the size of the gaps between their general human development index (HDI) and GDI scores (UNDP 2009). On every measure, the deterioration of women’s equality in Canada is shocking. At base, however, the problem is that despite earlier gains in gender equality, the fundamental economic disadvantages of women were never meaningfully addressed nor changed. Figure 1 reveals that even now, men’s and women’s incomes in Canada continue to be markedly gender segmented, reflecting women’s continuing lack of equal access to income equality and their disproportionate relegation to unpaid and poorly-paid work.