Tuesday, March 5, 2013


This is the second of two blog posts; the first looked at income and Social Security tax and reform here in March 2013.  This one will look at federal health care tax and benefits reform.

Now that the 2012 elections are well over, the Affordable Care Act is over a year old and implementation is progressing, it is worth looking anew at some ideas for removing the gender discrimination in the Act. 

BACKGROUND:  The current federal health and human services system, including the Affordable Care Act, has a bias that assumes women are the only biological parents of children and bear primary if not sole responsibility for their care and development.    These assumptions are not accurate, as every child has a male biological parent and ignoring this poses health hazards to children, and child development is particularly well supported when a child has two parents who bear responsibility for children's care and development.   While historically some problems such as an inability to prove or disprove paternity[1], may have clouded health research and policy development, paternity has now been provable for over 50 years.  Also, the bias in human services and welfare programs focusing on women as primarily responsible for the care and development of their children may have had to do with historical problems of local "head and master" marriage laws[2] or laws preventing married women owning property[3], discrimination preventing women from developing skills valued in the marketplace[4] or from earning money[5].   Many of these problems have also not existed or been declining for decades, however, and many families are increasingly structured around a 2-earner/2-parent model. 

In addition, since 1970 when paternity became provable, a significant amount of medical research has illustrated issues that can arise from the biological contribution of men to their children that were not visible before.  These include problems from (a) genetic deterioration in sperm as men age that is inherited by the child and becomes a permanent part of the human genome[6] and (b) epi-genetic effects on sperm, where a man's health affects his reproductive DNA and the state in which it gets transmitted to his children.  This evidence suggests it is in children's interest that men who want to have children have them children when they are younger and for them to take their own physical health with regard to reproduction seriously, something that women have been heavily educated and counseled about for years but men have not. 

Further, research into human evolution and how child development is affected by family structure has also illustrated why human beings, in contrast to other primates, have tended to form a family structure of two responsible parents, including evidence that human evolution from primates required at least some men to take this responsibility and that child development is heavily distorted by a poor relationship with parents, whether or not both parents are living in the household. 

When the government programs do not reflect these realities, however, this can create discrimination against these families, prevent their formation even when prospective parents are otherwise ready, willing and able to set them up this way and cause preventable problems to children and their development. 

PROBLEM IN THE AFFORDABLE CARE ACT PREVENTIVE SERVICES:  The Affordable Care Act provides for a no-copay "well woman" check up to all women, regardless of whether a woman is pregnant or even of reproductive age.  There is not a no-copay "well man" check up, however, despite the individual mandate in the ACA that requires men to have health insurance in the same way women are required to have it. 

Because the ACA also provides for a number of no-copay preventive care services and screenings to adults, including a number of aspects of preventive care that affect men who want to have children, such as diet and obesity counseling, HIV screening, immunization, sexually transmitted diseases, tobacco use and emotional health, these are all more accessible to women because they are relieved of the copay for the physician visit which is needed for access to these no-copay services.

Further, the ACA list of the adult no-copay preventive care services also has a separate list that women receive and men do not.[7]  Some of these relate to the biology of pregnancy or lactation, but many of them do not.  For example, women receive no-copay contraceptive education, counseling, methods, and procedures, while men do not.   While there are fewer high technology methods for male contraception that require a doctor's care than those for women's contraception, there are some.   Also, there is no explanation for education and counseling not being provided to men with no-copay as it is to women, without this education and counsel, preventable male reproductive health issues, including those that affect the health of their children, go undetected.  In addition, women also receive no-copay screening for domestic and interpersonal violence and men do not; while this is apparently oriented toward women as victims of this by men and possibly as perpetrators against children (and, although rare, against men), it seems that some men who are at risk for perpetrating violence against women or children might benefit from and welcome no-copay screening and counseling for this issue comparable to what women receive for no copay.

Some health policy experts have identified a bias in the health care system (prior to the ACA) against men's preventive care.[8]  They believe the shorter life expectancy of men is partly attributable to this bias.  Further, while men do not tend to consume health care services when they are young (perhaps in part because of the bias even among health care providers against male preventive care), they often become very expensive consumers in middle age and later life because of preventable problems, including chronic health care problems.  Many of the high costs of the health care system spent on treating middle-aged and older men could possibly be reduced by removing the bias against male preventive care and also improve the quality and length of men's lives.  The ACA is apparently currently just reflecting this costly bias.

Further, the health of the father is highly relevant to a child's health and welfare (both the genetic health of the biological father, and physical and emotional health of men who are parents to their children), and this bias against male preventive care thus harms children's health and welfare.[9]  With regard to family structure, there is the added problem that in 2-earner/2-parent families particularly, the man's presence not just as an earner but as a parent is required and therefore the health of the man is important.   Federal health and human systems biases against preventive care for men thus harm child health and welfare unless a man has the financial resources and knowledge to circumvent the biases.  

PROPOSED SOLUTION:  Add a no-copay "well man" check up to the covered services in the ACA.  Add no-copay preventive services for men to match the preventive services for women other than those relating only to the specific biology of pregnancy and lactation.   Add any preventive services for men needed for (a) the psychological and mental health issues associated with taking responsibility for meeting a child's need and (b) the specific biology of the male reproductive system, including types of contraception that require a doctor's care, education and counseling.  Add education and counseling on male reproductive health preventive care, such as male biological clock issues.


Any thoughts?  Please let us know them in the comments.

[1] Paternity became provable and disprovable through DNA evidence in 1970.  Cost for paternity testing now ranges from $150 to $1000.
[2] For example, Kirchberg v. Feenstra (S. Ct. 1981) invalidated the last state "head-and-master" marriage law, a community property law in Louisiana.  
[3] In the United States coverture laws that required all marital property to be in the man's name only were common in the 19th Century, although they began to be repealed extensively in the latter half of that Century continuing into early 20th Century.  In Reed v. Reed (S. Ct. 1971), the Supreme Court ruled that the Equal Protection Clause prohibited discrimination on the basis of sex in a family economic matter.
[4] Girls and young women now meet or exceed the percentage of boys and young men completing a variety of educational levels.  For example, in 2010, 62.8 percent of young men who graduated from high school enrolled in college, up 7.6 percentage points from 1970, but below the continuation rate for young women—74 percent in 2010, up 25.5 percentage points from 1970.http://blogs.edweek.org/edweek/inside-school-research/2011/05/report_boys_college_readiness.html
[5] For example, women now earn approximately 77% of the income from wages that men do on average, up from about 60% in 1980. 
[6] Geneticist James Crow has said that the greatest threat to the human genome is not "infertility but aging, fertile men" who reproduce because of the genetic deterioration in sperm as men age that is passed on to children and remains in the deteriorated state.  http://how-old-is-too-old.blogspot.com/2006/11/james-f-crow-as-men-age-their-sperm.html

Friday, March 1, 2013


Now that the elections are over, the tax laws have been revised a bit, and we are into the the 2013 year, it is worth looking anew at some ideas for removing the discrimination against 2-earner/2-parent families.  Here's the first of two blog posts I'll write on this. The first looks at income and Social Security tax and reform.  The second will look at federal health care tax and benefits reform.

BACKGROUND:  The current federal income and Social Security tax and benefits system is built around and provides funded and unfunded subsidies to a family structure of a sole breadwinner and nonearning primary care parent and substantial tax incentives to sole breadwinners themselves within these families to reinforce this structure. 

Here's a chart that illustrates the problem:

This chart, prepared by the Tax Foundation, applies 2013 federal income and payroll tax law to marriages based on whether the family has one or two earners and based on the gross income of the family.  It assumes all wage income (no income from property or capital), no itemized deductions and no children.
The white section in the middle at the bottom was added with the Bush Tax Cuts.  Prior to these cuts, this section would have been red.
At any point along the horizontal axis, the more the family moves away from equal earnings spread over two earners (from the bottom to the top of the chart), the more the lower earner has to pay higher marginal rates and the higher earner pays lower marginal rates (sometimes called a "marriage bonus").  This is an accelerating incentive to consolidate family earnings in a sole breadwinner and unpaid work and responsibility in a nonearning parent.
This chart does not plot benefits received in Social Security and Medicare.  These benefits also skew toward single earner (or sole breadwinner) households; generally speaking, the closer a family is to equal two-earner (the more it is in the red or the white), the more it subsidizes a family at the same level of gross household income on the horizontal axis in the green zone.  
The subsidies from the red and the white areas to the green area are sometimes referred to as the "marriage bonuses", or tax subsidies that sole breadwinners receive (the stay-at-home parents actually receive a "marriage penalty" themselves, as I explain below).  The Tax Policy Center has noted that much of the federal debt run up since 2001 in the George W. Bush Presidency derived from his tax cuts increasing these unfunded subsidies to sole breadwinners.

These subsidies derived from the fiction of earned "income splitting" have been in place to one degree or another since 1948, however, and they have stayed in place in the Obama Administration. They actually have become exacerbated in the Obama Administration because the paradoxical effect of progressive taxation on increasing these problems rather than reducing them, as is discussed more below.

Here's a calculator, prepared by the Tax Policy Center, which measures the income tax effect (not the payroll tax effect as well as is illustrated above) of choosing to be married versus being single, and which may help you evaluate your own personal situation if you would like to learn more.   Marriage Penalty Calculator (w/o payroll taxes)  (The calculator does not address the issue of subsidy to sole breadwinners and accelerating pressure to set your family up in that manner.)

One thing to keep in mind with payroll taxes: it may appear on first glance that because the employer pays a portion of the payroll tax, the employee's marital situation is irrelevant to that portion.  This is not the actual economic effect when one looks more closely, as most employers reduce salaries or wages of employees by the payroll tax amount paid by the employer.   This means that, while as a matter of administrative responsibility payroll taxes are paid by both the employer and the employee, in actual economic effect they are paid entirely by the employee.

This is an issue that particularly directly affects Colorado because (a) it has a high percentage of 2-earner/2-parent families and singles and exports approximately $0.22 of every federal tax dollar paid to states that do not have a high percentage of this type of family and (b) the civil unions law that became effective in 2013 may mean heterosexual couples in civil unions present legal challenges to the federal joint taxation system, with a good argument that they are entitled to individuate their earnings and expenses for tax purposes.  This won't help them with the problem of having to subsidize patriarchal families with "marriage bonuses" or with the problem of their paying surplus payroll taxes and reduced benefits, but it may help them with basic marriage penalties and the problem of regressive taxation (discussed in more detail below) which is both unfair and economically unproductive and inefficient, as it skews the economic decision-making of the family.  Further, for those who are concerned about the child development support issues I'll describe in the next post, the skewing runs in conflict to what children need.

Below I'll look at these problems first in the income tax system and then in the payroll tax and Social Security benefits system and in the process suggest a few solutions. 

1.   PROBLEM IN INCOME TAX SYSTEM:  The marriage penalties illustrated above, which are particularly discriminatory in the red zones, are themselves reason enough to reform mandatory joint taxation of married couples.  But there's also a problem of regressive taxation that merits a closer look.  The current federal taxation of married couple's earnings and expenses on an artificially amalgamated basis (a policy instituted in 1948)  (a) require the lower earner to pay tax at the higher earner's marginal rate and (b) allow expenses personally paid by one earner to be used as credits or deductions against the other (often the higher) earner's income.  These forms of regressive taxation are made even more acute, paradoxically, by the recent increased progressivity in the tax code.   It is mathematically impossible to have a tax system that is (a) neutral as to family structure, (b) progressive, and (c) taxes equally earning families the same; the simplest way to repair this is to remove fictions of joint earning and expenses in families.  Also, the current taxation on a fictional joint earnings basis (a) would not be allowed in a business partnership return under the "substantial economic effect" rule, and (b) fall behind OECD best practices (in 2011, only 11 of 34 countries had joint taxation of married couples' earnings (and many of these make adjustments to remove fictions in the return that the US does not)).       

PROPOSED SOLUTION:  Make federal income taxation of married couples a system of joint filing but individual taxation on individual earnings and expense and joint taxation only on income from property or capital actually jointly owned and managed and joint expenses.  Create a child-centric return for unmarried couples applying for child-related welfare such as the EITC.

2.   PROBLEM IN PAYROLL TAX SYSTEM:   Two-earner married couples often pay more Social Security taxes than a comparably earning sole breadwinner family because of (a) the progressivity in benefits, (b) the lack of a property-capital-earner tax to support the progressivity and (c) the cap on earnings subject to tax. [1]   Further, 2-earner married couples and singles receive reduced benefits.   They (a) do not receive the spousal benefit in Social Security, and (b) forfeit the survivor benefit (to the extent the benefit is less than or equal to an earner's own benefit, in the case of 2-earner marrieds, and altogether in the case of single people).   A chart I included in this post illustrates this in more detail.  Also, because benefits are progressive, a very low earning dependent spouse of a sole breadwinner receives higher benefits relative to taxes paid by that spouse than a more equal earning spouse relative to taxes paid.  In addition, in a general sense across the economy, Social Security benefits are progressive and high wage earners are required to subsidize low wage earners in benefits but capital and property-based earners are not required to pay anything.  This creates a triangulated moral hazard problem in which conflict and political polarization between high wage workers and low wage workers is exacerbated by repressed conflict both high and low wage earners have with untaxed "free-rider" capital and property-based earners.  An example of how a private company could seek rents through this system is to: (a) hire many low wage workers so as to take advantage of the progressive benefits scheme to shift costs to high wage workers (which the company does not employ or employs in very small numbers), (b) preference men either directly or indirectly, by creating long shifts that are incompatible with sharing parenting responsibility so as take advantage of the sole breadwinner subsidies.   Since the owners of the company pay no taxes to support either of the subsidies in (a) or (b), they can effectively shift costs of their employee's retirement to high wage workers, particularly high wage workers who are single or in two-earner marriages, and to debt borrowed from future generations.  The employees do not protest because they do not feel the cost of this as much as if there were not the progressive benefits and sole breadwinner subsidies.  Walmart is considered a possible example of this phenomenon.

While payroll taxes are administratively paid by both the employer and the employee, in actual economic effect they are usually paid entirely by the employee, as most employers reduce salaries or wages of employees by the payroll tax amount paid by the employer.

PROPOSED SOLUTION A (FOR PARENTAL LEAVE):  Allow each of two payroll tax paying coparents (whether single or married) a paid leave benefit (modeled on and associated with FMLA, which applies to certain workers) on the birth/adoption of a child.  If such benefits are made progressive in the manner of Social Security generally, assess a capital/property earner tax to cover the progressivity. 

PROPOSED SOLUTION B (FOR MAKING RETIREE FAMILIES WHOLE):  Eliminate the spousal benefit and split Social Security checks between sole breadwinner married couples (currently, each sole breadwinner receives a check for 2/3 and the spouse 1/3 of the sole breadwinner/spousal benefit, although the benefit can increase into more portions if there is more than one 10-year dependent spouse).  Reduce the retirement benefit of a sole breadwinner so that there are sufficient benefit resources for a survivor benefit without having to draw from the accounts of 2-earner married couples and singles or generating deficits.   The deficit-based spousal and other retirement benefits to sole breadwinners could be phased out at one or more generational transition points, such as the beginning of the Baby Boomer generation (people born after 1946), people born after 1953[2], or the end of the Baby Boom generation (people born after 1963)[3].

PROPOSED SOLUTION C (FOR ELIMINATING DISPARATE BENEFITS FOR SAME PAYROLL  TAX PAID AND TRIANGULATED MORAL HAZARD PROBLEM): Either (a) eliminate the progressivity in Social Security benefits and make it a more conventional insurance program with flat benefits, or (b) add a capital/property-earner based tax to compensate low wage workers' progressive retirement benefits and family leave.

ASPECT OF SOLUTION REQUIRING ATTENTION:   The Family Medical Leave Act (FMLA) (which allows a 12-week unpaid leave)  does not apply to everyone and the leave benefit, if associated with FMLA, would need to apply to all 2-payroll taxpayer coparents, even those who don't qualify for FMLA.


Any thoughts?   Would love to hear suggestions in the comments.

[1] Medicare has traditionally had these same issues, however, the new capital/property earner Medicare tax added by the ACA may alleviate this issue somewhat.  The fact that sole breadwinner/nonearning parent families pay only one set of Medicare taxes and receive two sets of benefits may be encouraging this type of family set-up, even when it is not in the child's interest, however.
[2] And who reached age 18 after Reed v. Reed (S. Ct. 1971) (the first Supreme Court decision that the Equal Protection Clause prohibited discrimination on the basis of sex in a family economic matter) and after paternity became provable and disprovable in 1970.
[3] And who reached age 18 after Kirchberg v. Feenstra (S. Ct. 1981) (invalidating the last state "head-and-master" marriage law, a community property law in Lousiana).