Gender Based Tax: She works hard

Recently Alberto Alesina and Loukas Karabarbounis of Harvard University presented their paper “Gender Based Taxation and the Division of Family Chores” to an audience of 17 men and 8 women, one of whom left early. The paper models the increase in home chores related to an increase in disutility at work, something women have never needed an economic model to explain. Still, the academic undertaking of spousal bargaining over the “allocation of home duties” is a step in the right direction.

The paper focuses on the idea of “labor supply elasticity” which is just a fancy way of saying, do women and men work more if they get paid more? The application of the Ramsey “inverse elasticity” rule in a model of labor supply implies that males should be taxed at a higher rate than females because they have a less elastic labor supply function. This means that when men make more money they spend more time working, but women don’t. To counteract this imbalance women should be taxed less then men, thereby increasing their real income per hour worked. It’s an incentive to draw women into the workforce and it holds weight.

Unfortunately political support for Gender Based Taxation (GBT) is not on the table, let alone tabled. Conservatives would undoubtedly argue that public policy should not stick its nose into the organization of a family. A hypocritical argument, but it enjoys support in the current political atmosphere. Legislation on heterosexual marriage by the federal government is a greater priority, and republicans would possibly vote in tax cuts for wealthy women holding dividends and capital gains income, but working women would never receive a break.

Women’s rights are simply no longer a popular topic. Women in the workforce have been overpowered by desperate housewives.

Still, some change is necessary. In 2006 women workers made 81 percent of what their male counterparts received. (Source: Bureau of Labor Statistics) The system is measurably off balance. Currently it favors male workers but if the right economic adjustments are made, everyone can profit.

Half-a-Candidate

The Wall Street Journal reported today that “support for the Republican Party is falling sharply, but John McCain remains competitive with both Democratic presidential candidates.” Upon completion of the democratic primary though, where all states held vibrant and publicized elections, unified Democratic support will be sharp. The race to the presidency has not even started, but still McCain only ties against an empty ballot slot.

If the democratic primary has taught us anything, real candidates win when the race is between a name on the ticket vs. blank.

The Wall Street Journal might just want to report that there is a three way tie. One third of America is for Obama, and the other two thirds are divided between Clinton and McCain. That is the same thing as remaining “competitive with both Democratic presidential candidates.”