Saturday, July 30, 2011

Single Income Married = Less Taxes

From the inestimable Ann Althouse:
"The entire two-income trap... is actually a two-income tax trap..."

Explains Todd Zywicki, correcting Christopher Caldwell, who was explaining Elizabeth Warren.
The 2-income family gives a shocking amount of the extra money they scramble to earn to the government. I'm no tax expert, but my suspicion is that this happens because liberals like more taxes and conservatives like subsidizing the traditional family with a stay-at-home parent. Put those 2 forces together and we get the (perverse?) burdening of the 2-earner family.

Why don't more couples do the math and figure out that they should not do all that extra work for the government? Life is so much simpler with the 1-earner family, and the spouse who doesn't bring in the dollars can provide great economic benefits by directly performing work that would otherwise have to be paid for, most notably child care. Since this economic benefit isn't taxed, it's a double benefit. Instead of buying inferior childcare (or other services) with after-tax dollars, you perform the work that is worth that much money, and you're not paid, so you don't pay taxes on the value it represents.

When I went to junior high school, we girls were required to take a course called "Home Economics," but it was just learning to cook and sew. I think young people should be taught a course called "Home Economics," which teaches a sophisticated analysis of the economics of living together and sharing money and work. But perhaps the government, through its schools, does not want to reveal the amazing secrets of legal tax avoidance. How much better to indoctrinate kids to seek the highest incomes they possibly can achieve! That is the government's strategy for raking in the most most taxes. And it works so well. The liberal teachers support the ideology of women working and don't want to tip off young people that the traditional 1-earner family is an excellent approach to personal wealth. And the liberal legislatures don't want to alleviate the tax-burden on the 2-income families, because they love raking in the tax money.

No comments:

Post a Comment