Wednesday, April 25, 2007

Alesina and Ichino: Women Should Pay Less Tax

The idea of raising taxes for men and lowering them for women is ridiculous. There are several problems with the logic presented in this article and I will explain each of them.
It would also make gender discrimination more costly for employers and would be fair because it would compensate women for bearing the brunt of maternity and for the fact that the possibility of having children can negatively affect their career prospects.

This sentence makes two unfair assumptions. The idea that changing taxes would discourage gender discrimination is a nice thought, but unrealistic. I hate the idea that only certain groups can be discriminated against. It is true that men dominate the workforce, but that does not mean that they cannot be discriminated against. Raising the tax for men and lowering it for women would further gender discrimination in another direction. If anything, this would draw a bold line between men and women in the workforce and cause tension.
The other unfair assumption is that women “bear the brunt of maternity.” This statement makes it seem as though women have no choice but to have children. Childrearing is a choice and should be treated as such. Women who decide to have children should be respected, but they should not be treated as victims. Having children may affect their professional careers, but this is a decision that each woman is free to make for herself and should be respected as such.

If and when a change happens (and many social activists consider that a desirable goal), the response of male and female labor supply ... may become less different from each other... At that point, one may need to reconsider the differences in tax rates, precisely as the basic principles of optimal taxation suggest.

This statement can easily be refuted by a statement earlier in this same article. The author states that the labor supply of women is more sensitive to their after tax wage than men. If lowering the tax rate is expected to increase the labor supply of women, then raising the tax rate should be expected to lower the labor supply of women. The method described in the above statement would bring the workforce back to its current state.

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