'But how do we make employers and laws catch up to modern parenthood?'

Don't vote for Republicans!!

So the link to the Executive Summary doesn't provide that much. I don't know, this one seems a little dubious. I can always find numbers and manipulate them in a way that supports whatever perspective that suits me.

Is it really a *Woman's* issue? Wouldn't the same tax rules and numbers be applied if the roles were reversed? Hence the tax rules would be blind to gender?

I'd be curious to know if this book addresses *singles* concerns about being penalized when filing their taxes and whether or not there is merit to their discussions. Has anyone here read this book?

Hi, I've read for a while, but never posted... Just wanted to comment, while you may or may not debate the wisdom of the tax policy in America, lets remember that it certainly doesn't single out working women - if,as in my case - and the case of many of my friends, you outearn your husband by 2 or 3x, the man is the person who's "punished" for working. While its true that historically, women have made less than men and been in lower paying professions, I think that in the current generation (as with my friends and I), you see a lot of women in professional fields (especially sciences and technologies) who may be substantially out-earning their liberal arts husbands.

"When all taxes and other costs associated with working are considered (such as paying for child care and housecleaning), a woman in a middle-income family can only expect to keep 35 cents out of every dollar she earns."

Interesting. So, assuming that the husband is the father of the children and that he lives in the house, how much does he earn when his half of childcare and housekeeping is deducted from his salary? Or do we only deduct childcare and housekeeping from women's salaries? If that's the case, then the feds aren't the only ones who are old-fashioned.

Bad assumptions, bad statistics, bad conclusions. Is this blog about promoting bad books?

How does this have to do with moms? Coulndn't you say instead of:

'The entry of women into the workforce has been the greatest economic and sociological change in our society in the past 60 years'

something like
'The greatest economic change in our society in the past 60 years has been the increase of 2 income earners in the family'

and then stop framing it as a sex-based family issue?

Uh, what a horrible premise. Why does it have to be the wife's income that's at the top of the tax curve? Or, either shouse for that matter.

It should be averaged it out... I earn the first dollar, my wife earns the second, and on up.

And, once again, you're whining about upper-middle income wives being given the shaft. I'm sorry, but if your family's combined income places you in those high tax brackets, consider yourself lucky.

I agree with Lizzie, if I work when I have a child, why are the cleaning and childcare expenses taken out of my pay? Why not my husband's? Or why not equally?

Right now we have a cleaning company and a lawn care company so we don't need to do the work. I make more than my husband so does that mean he is being shafted?

This supposed disparity occurs because we consider a married couple just that--both contributing income to the FAMILY, and both spending from the family's resources. I agree it's a big presumption that it's in fact the wife's income being "penalized". Does that assume that she's living off of her (diminished) income and her husband is living off of his?? That is not a typical arrangement in a marriage. It is true that marginal income in a family is taxed at a higher rate--whether it comes from overtime pay, a second job, a raise, or the spouse working. I don't believe income from the spouse should be treated any differently than any other incremental income as it all contributes to the family's financial resources.

While I'm not sure yet if I trust all their assumptions, I do agree with most of their conclusions, especially

"We need a flexible employee benefit system that gives employees more choices, making it easier for dual-earner couples to obtain higher wages rather than unneeded, duplicate benefits and for part-time workers to accept lower wages in return for more valuable health and retirement benefits."

I really don't see a downside to this on the part of the company. And I'm sure that part-time workers would really appreciate the option since, from what the Executive Summary tells us, they would not receive tax breaks for buying health insurance on their own.

I agree this could be framed as primary wage-earner and secondary wage-earner, not husband and wife. However, there are legitimate tax implications that affect two-income families that need to be understood.

>>I'm sorry, but if your family's combined income places you in those high tax brackets, consider yourself lucky.>>

It's not necessarily HIGH tax brackets. It's the next HIGHER tax bracket. If I earn income that would only put me in the 15% bracket and my husbands's puts him in the 25%, and we're married, I'm taxed at 25% instead of 15%. That's a huge difference, but neither of us is necessarily making a lot of money.

>>I don't believe income from the spouse should be treated any differently than any other incremental income as it all contributes to the family's financial resources.>>

Again, it is treated differently by the tax system. The gist of the "marriage penalty" is that the lower earning person may get taxed at a higher rate than he or she would if taxes as a single person, and that 1 person earning $90,000 pays less tax than 2 people who together earn $40,000 and $50,000. It doesn't matter if it's the man or the woman who makes more. The point is, it's unfair to couples where both people work.

The calculation about deducting child care expenses from the lower-earning person...I've posted before that I disagree with that argument. But the tax concerns are legitimate.

I am just taking a small break from work now. I will start off by saying I did not read the book or the summary yet. But there is a bunch of false conclusions made by the author of todays blog. The child care and the house cleaning is not assumed to be taken out of the second salary (namely the women in this example). It is actually something taken out of both salaries equally. Given you have a shared partnership in a marriage. I do not know of too many families, that say the second working spouse is entitled to their earnings minus child care and house cleaning expenses. I don't know but I am in the upper 25% of hhld income in the country. And I net more then 47% of my gross income after child care and housing. But that may be because my income to child care ratio is still very high. Meaning, I use a smaller percentage of my disposal income for childcare (simply because I am a higher wage earner). So I don't see this as hurting the upper middle class and wealthy as much as hurting the lower class wage earners. I don't know how many of you are following suggested changes in SSA. But one of the proposals on the table is to eliminate the spousal benefit. If that goes into affect then it does the exact opposite of what the article is suggesting. It will punish people who do not have two working spouse. Contrary to what this article is stating, a women does get some of her SSA money. She has the option of taking out her SSA earnings at the age of retirement or the spousal benefit. Which ever is higher. If they are both living, she is entitled to his benefit and he is entitled to his benefit. She is not short changed in anyway. It is only after death of one spouse, does the benefit for the hhld get reduced to one benefit. Even then, she or he ( the remaining spouse) gets to choose the higher of the two benefits. Why is that punishing anyone? If anything that is protecting the remaining spouse. Clearly if one person dies, they do not "technically" need or deserve two benefits. I don't agree at all if with this article. Yes two income wage earners are taxed at a higher rate then one wage earning families. But they bring in more money. Why shouldn't they be taxed more? I think one could argue that the compensation for child care and other costs eliminate the cost of working. But I could see for some people it doesn't. But for middle class and up, this is really not an issue. The only people this is really hurting is the lower class.

'Bad assumptions, bad statistics, bad conclusions. Is this blog about promoting bad books?'

That's what I was thinking too! I have taken graduate level statistics classes. I don't believe that Leslie knows much about statistical analysis, or the interpretation of statistics.

Correction: I meant to say she is entitle to her benefit. I am a statistician and I think the author does not understand much about statistics. But I don't understand too much about writing and spelling:)

As a side note, the fair tax would completely eliminate most of these problems!

http://www.fairtaxvolunteer.org/pdf/FairTax_Act_Summary.pdf

OK, are there any accountants out there? My accountant told me that the marriage penalty is mostly a myth. Even studies show unless there is a large descrepency of the two incomes there is virtually no penalty. Also the new tax laws 2005, eliminated most of the penalty. My argument has always been that two wage income earners should be taxed more then two single people with the combined income of the married couple. Mainly because there is some economy of scales working here. Married couples enjoy some benefits that reduce their overall expenses; like family coverage on insurance, reduced auto insurance etc... Even food purchased in bulk works out cheaper. So why do married couples have a problem with having a small penalty? If there are any accts out there that know the truth, please let me know. I have always wondered about that.

I work part-time as an economist. Not only does the marginal tax rate for the second earner, whoever earns less per hour by this definition, discourage that person from working more, but wait until you're applying for financial aid for your kids for college. While our first kid isn't eligible for much, our second son will be if he chooses to go to a fancy private college like his older brother. In effect, every dollar I earn in the next few years will just be one more dollar which we won't receive in financial aid. The incentive to work has just been changed dramatically, especially since we also have a four-year-old whom I am loathe to put in a lot of day care. I'd rather continue to work part-time, take him to the National Zoo off-season, and let the financial aid system foot part of our bill.

I'm not trying to be cynical, but given that college tuition is almost a third higher than it would otherwise be, since the colleges have an incentive to keep it high -- their federal subsidy for low-income kids is greater, and they figure the truly affluent in this country don't care whether it's $20 K or $30 K they're shelling out for tuition. (One of my son's roommates hails from Manhattan's Dalton School, where tuition is close to $30 K/annum, so I don't think tuition is a big deal for his family.)

We need to change our tax laws and we need to revisit the whole federal system which gives needy kids college money. I'm all for giving them money, and applaud Harvard and Princeton for eliminating Early Action/Decision, but I think the system has a lot of inequities.

Mother of four kids -- oldest a college freshman

>>>If her husband has paid the maximum level of his Social Security payroll taxes up to the $90,000 salary cap, Wifey must pay Social Security taxes on every dollar she earns (up to the same maximum). She gets few, if any, extra Social Security benefits.>>>

Leslie, why is this a problem? Don't both spouses each get a separate social security check when they retire? If so, shouldn't their contributions be considered separately? If the couple only got one check, I could see this issue but otherwise I don't understand.

My biggest problem with the "marriage penalty" are when breaks such as child tax credit and student loan deduction have one maximum for singles and more for married couples, but not double. I.e., 75000 maximum income for singles to be able to declare the student loan deduction, but only 110K for married. If my husband and I just lived together, we could both get the deduction, but since we are married with good salaries, we cannot. Penalty.
Reducing other expenses has nothing to do with the tax penalty.

I think the assumption in the article is that when most people look at their finances and decides who stays home, they parts of the formula are a) who makes less money b)who has the fewest benefits (ie life insurance, subsidized childcare, medical care, other ala carte benefits, etc) and c)is the cost of childcare more than the lowest salary of the couple? You do the cost benefit analysis. Usually, it is the woman who makes less, but it appears that may not be true to the members of this blog.

In my family, I make more money than my husband. I supported my husband while he went to school and paid for childcare for our first child. Now he is finished with school, but we have another child on the way. Childcare would cost about $24K a year for two kids and he would barely make that with a college degree after you take out taxes, work wardrobe costs, and transportation expenses.

Michigan wrote:
Just wanted to comment, while you may or may not debate the wisdom of the tax policy in America, lets remember that it certainly doesn't single out working women - if,as in my case - and the case of many of my friends, you outearn your husband by 2 or 3x, the man is the person who's "punished" for working.

Quite correct, it's called the "marriage penalty", not the "soak the wife" penalty. This may disproportionately affect female spouses, but it is financial public policy, not social public policy, so it is unfair to ascribe any intentional harm to it. Sort of like the repeal of the estate tax is designed to 'help' the rich, not specifically to 'hurt' the poor.

Maybe I am the only one, but I hear women say ALL THE TIME "If I were to work, I'd hardly earn more than the childcare expenses." There is a widespread, if erroneous, assumption that if a woman's salary does not cover childcare it doesn't make sense for her to work. Should not be this way, but it often is.

It's amazing how many people really fight against the fact -- yes, the fact! -- that on average, men make more than women do. Of course it may not apply to your family or to some people you know, but taken as a whole, that's how it is in the US. Therefore, it will usually be the woman earning in what would be the lower tax bracket. You guys are so anxious to make the blog entry appear gender neutral that you miss the bigger point!

Suzanne,

Suzanne,

You are right about finical aid system. My dad worked his last five years working in a factory. My mom cleaned banks for minimum wage. I also worked in the factory making about 6 dollars and hour. My families combined income was about 30,000 dollars. This glorious amount of money put financial aid out of my reach. While working while going to school taught me a valuable lesson, I never understood why I had to do it and pay back my students loans. Why other people who got to go to school for free couldn't work and get student loans as well. A little off topic, but I agree that needy kids need breaks but I also think that the system is broke all around.

I had a friend back home who had a couple of kids and didn't want to work, so she got to go to school for free all the way up to her masters on welfare, guess what she still doesn't work and doesn't have to pay any of that money back.

the post to suzanne was from me!

Confused, here is an example of what folks are complaining about:

My mother worked her entire life, though neither she nor my father earned enough to max out social security.

My father's twin had a wife who never worked, but he earned far more than the social security max.

When my aunt turns 65 she can choose the "spousal benefit" which, because my uncle was a high earner, is higher than my mother will receive-- even though my aunt personally never paid into the system, and the total amount of money the U.S. received through my parents was far greater than what my aunt and uncle put in.

Does this make sense?

"There is a widespread, if erroneous, assumption that if a woman's salary does not cover childcare it doesn't make sense for her to work. Should not be this way, but it often is."

So if it's erroneous, why validate it?

I agree the tax laws do not really work well if people just choose to live together. But then again, if you just chose to live together, you would not be covered on each other's insurance and have different legal protections. People will choose to get married regardless of tax penalties or incentives. It has to do with broader benefits and cultural norms. As far as student aid, isn't most of the aid given in a form of loans and work study? What percentage is actually a grant (money not being paid back). As far as I understand it, private schools do offer a decent percentage of aid to families in financial need. But public universities offer very little. Most of the aid comes in a form of loans. So in my opinion the government is not footing the bill for anyone. The loans need to be repaid and private schools offer their own money for grants. It has nothing to do with the government footing the bill. Please correct me if I am wrong. But I went to a private school too. That was many moons ago. Again, if you really look at the full picture, two working families (on average) are more financially stable then a comparable one income family. Meaning a family making 90K for two earners, is still more financially stable then the one income family earning 45K. They get two retirement funds (pension, SSI, and 401Ks), they generally have higher disposable income and higher savings. We have a progressive tax system in this country. Meaning people who have more money pay more taxes. If you don't like that try taxing the billionaires at a flat tax of 17-25%. How fair is that? I think people don't understand that they still have it pretty good around here with taxes. Granted our money could be better spent by the government but we are not over taxed in this country.

American's pay some of the world's lowest taxes. I don't mind paying taxes to support our country. I don't always agree with how tax money is spent but I am happy to pay them.

And I agree with posters that say that child care shouldn't always come out of the wife's money since the husband is using the day care facility too.

As for college tuition, I think it is a waste for students to attend Ivy League as undergraduates. IMHO and experience, choosing the right school really doesn't matter until you reach graduate school.

>>My families combined income was about 30,000 dollars. This glorious amount of money put financial aid out of my reach. >>

I do some part time work for a non-profit that is aligned with a top-tier university. We award a scholarship every year and are able to view some of the basics of the student's financial situation.

While I have no knowledge of your situation, I wish to assert in no uncertain terms that a family of 3 or larger earning $30k, IS eligible for federal, state and private financial aid (assuming no other non-salary factors, like other loan defaults).

I can also point out that when I went to college in the late 80's my fam had a combined income of about $40k and we WERE eligible for all forms of aid.

I just don't want the blog to give the Dept of Ed (FSA program) an undeserved bad name. I have had the good fortune to work with some of the folks over there, and they do their best to help as many as possible.

-Pp.

Up to $5000 in childcare expenses are tax deductible. Unless you make a lot of money. Daycare runs 10000-14000 per year. The government is saying that one half to one third of that expense is tax free. That seems fair. For families that are really poor, a lot of other assistance kicks in.

I have always viewed the tax laws as encouraging both spouses to work, not the opposite. If one spouse stays at home, he or she gives up both potential income and on their tax return, are not allowed to deduct the imputed value of the childcare, i.e., for tax purposes, services you provide to yourself have no value.

I am not surprised the conclusions of this book are incorrect. You have two people with agendas and a journalist involved. That is not a recipe for robust analysis.

"There is a widespread, if erroneous, assumption that if a woman's salary does not cover childcare it doesn't make sense for her to work. Should not be this way, but it often is."

I do think it is important to figure out if the lower earner (not necessarily the wife) is earning enough to pay for child care. If one is not, they need to be aware that they are essentially paying to work. It may be worth it if substantial raises are in the future or if you haven't earned enough credits for social security, etc. But if it's a dead-end job and you can save more by staying at home, why should you do it? Doing that calculation is an important part of the equation, though obviously it is not the only consideration.

Two things:

>>It's amazing how many people really fight against the fact -- yes, the fact! -- that on average, men make more than women do.<<

Not for much longer I'd imagine. Women are going to university in far higher numbers than men.

Secondly, I'm not married and I don't know for sure about how the IRA contribution laws work. I know that as a singleton you can put x amount in until you make $90K, but if you're married you can only put x amount in (each?) until you make a combined $120K. That $70K discrepancy seems insanely unfair. Did I understand this law correctly?

For many people (and I know I'm skewing towards the middle-class) that extra $70K in income is going to take a good number of years to earn and all during that time if they were single they'd be allowed to save tax free. Seems like a pretty big marriage hit and I don't understand why a rule would be built like that.

"In effect, every dollar I earn in the next few years will just be one more dollar which we won't receive in financial aid."

Right--because god forbid you should pay for your child's schooling.

Financial aid is not a limitless pool. If you can work and pay for your child's education, you should. Financial aid should go to families who are in a situation where every dollar the parents earn goes to keeping their heads above water.

Rather than complain about the financial aid you're not getting, either tell your kid he can't go to an expensive school, or start saving.

As for people who claim thier families made $30k-$40k and couldn't get aid, maybe the system was flawed in that you weren't informed about how to get aid, but it was out there.

The marriage penalty hits you regardless of gender. As long as two earners hit a high income, that high income is taxed more. Do you want to cut taxes for the "rich"? Two days ago (Working Mom Top Fears) Leslie was advocating more government involvement/benefits to solve private-sector issues. How would you pay for that if you're cutting taxes for the upper-middle class?

Don't make this a working women issue when it is not.

Is Leslie the author of the blog or another Leslie?

Despite both my wife and I taking out the maximum amount of deductions for income taxes, every year since 2004 we have owed a sizable amount to the government at tax time. I make about 2.5 times what my wife makes, but it still doesn't make sense that we can both max out our deductions and still end up owing more.

I expected to see a lot of comments cheering this book on, but I am heartened to see a lot of commenters as appalled and disgusted at the blatant bias and pure...silliness of this whole "debate" as I am.

Second, women tend to make less than men for a variety of reasons. Read the academic literature, not the pop culture Cosmopolitan magazine literature on it, and maybe, you will understand why. Women make different career choices, women choose part time career tracks, women bow out of the job market mid-stream to care for children--there are a variety of reasons. I'm a lawyer, and I look around me, and after the third or fourth year in practice, there are NO WOMEN to be found. I don't need statistics to tell me that women, on average, make less than men in my profession, BECAUSE THERE ARE FEWER WOMEN AT HIGHER LEVELS. I refer you all to the comment above...

"Bad assumptions, bad statistics, bad conclusions. Is this blog about promoting bad books?"

Please pick some worthwhile books to promote.

Correction: both my wife and I have reduced our deductions and exemptions to zero for income tax, not "maxed them out", yet we are still owing sizable amounts at tax time. Sorry about that.

Arlmom said "It's not necessarily HIGH tax brackets. It's the next HIGHER tax bracket. If I earn income that would only put me in the 15% bracket and my husbands's puts him in the 25%, and we're married, I'm taxed at 25% instead of 15%."

This is wrong. The tax system is a stepped system. Here is the 2006 tax table from http://www.irs.gov/formspubs/article/0,,id=150856,00.html

(it doesn't copy and paste well into the blog).

For married, filing jointly:

If you make less than $15,100 taxable income, you pay 10% of that in taxes.

If you make more than $15,100 but less than $61,300, you pay $1,510 + 15% of the amount over $15,100.

I've left off the other amounts since the point can be made here.

If you make $60,000, you are in the 15% bracket. But notice, the first $15,100 is still taxed at 10% (the $1,510). Only the amount in excess of $15,100 is taxed at 15%. If you had to pay 15% on all the income when in the 15% bracket, a person making $15,100 would pay only $1,510 while a person making $15,101 (in the 15% bracket) would pay $2,265. $755 more in taxes on $1 more in income. No way.

To running: I am not sure but as I understand the IRA contribution is deductible if you make 90K as an individual or 120K as married copule. You can always contribute to an IRA but the contribution may not be deductible. The earnings will always be taxed differed. Again if you are a married couple, earning more then 120K, a certain percentage is still deductible. Just not both contributions. Again almost irrelevant, because the percentage of Americans contributing to their IRAs or 401Ks is still way under the percentage eligible to contribute. Americans do not save very well. We have a negative savings rate in this country.

"There is a widespread, if erroneous, assumption that if a woman's salary does not cover childcare it doesn't make sense for her to work. Should not be this way, but it often is."

Given my recent experience in getting back into the job market after staying home with my kids for 3 years, I would have to agree with what Leslie is hearing from vocal at-work and s-a-h moms. Before my recent job hunt, I put together a spreadsheet detailing all of the expenses (childcare, commuting) that we would be paying when I went back to work and came up with a matrix of what my salary would have to be to make it worth while for our family in the present and future. Often times I would be presented with offers that would leave us with only health benefits and maybe $100 / month net as a plus - "not enough to get me into pantyhose" is what I would think. My headhunter thought I was crazy asking for a certain salary, but I was adamant and eventually found the right job for me and my family. That being said, I still make less than my husband and childcare (2 kids = $22K) does come from my salary because, if anything, it was an expense that we didn't have before when I was home - that doesn't mean that I eat bread & water for dinner while my family eats roast beef - it's just how we budget.

John, this happens to us too, but we have extra income from investments, interest on our bank accounts, etc. If you have any of these, this might explain the disparity.

RE: "Wifey must pay Social Security taxes on every dollar she earns (up to the same maximum). She gets few, if any, extra Social Security benefits."

Gee, guess it isn't really a benefit that she is entitled to he own Social Security Retirement. And it isn't a benefit in the eyes of this commentator that if, before she reaches retirement age, she becomes unable to work due to a disability, she can get Social Security Disability and qualify for Medicare - something she wouldn't get if she hadn't worked. If a non-worker becomes disabled, they don't qualify through their spouse for SSD and Medicare and they can't qualify for SSI and Medicaid if their spouse makes more than $665 a month.

RE: "The gist of the "marriage penalty" is that the lower earning person may get taxed at a higher rate than he or she would if taxes as a single person, and that 1 person earning $90,000 pays less tax than 2 people who together earn $40,000 and $50,000. It doesn't matter if it's the man or the woman who makes more. The point is, it's unfair to couples where both people work."

Household income is the item being taxed - not individual income. Household with 2 wage earners is maintaining one household, not two. (and for the income bracket that this whiney author is in, that means their McMansion) The example moaning about "2 people who together earn $40,000 and $50,000" is irrational supposition - those two people are NOT in the same household and pay the costs of maintaining Two households. If she would prefer that arrangement, get a divorce, set up two households and see if she comes out ahead.

RE: "My accountant told me that the marriage penalty is mostly a myth."

It is. Didn't use to be 30 years ago but that changed. Unfortunately you can never reason with someone who seems to adore feeling victimized because she is an upper income working woman with children.

RE: "When my aunt turns 65 she can choose the "spousal benefit" which, because my uncle was a high earner, is higher than my mother will receive"

And when your father dies, your mother can receive a spousal benefit. That benefit, by the way, 65% of the earner's benefit. All that means that if 65% of your uncle's benefit (payable after he is dead) is more than your mother's, is that your uncle made more than your mother. If your mother hadn't worked, she would only receive 65% of your father's benefit after his death, and not also received her own retirement.

Back in the 70's there was a push to enlarge the survivor's benefit to provide for woman who stayed who and did the housewife thing so they wouldn't be overly penalized and reduced to poverty. What, you prefer your aunt not have any Social security after your uncle dies?

Survivors benefits are also paid to minor children if a parent dies.

The solution is simple.
Dont file your taxes jointly.

"My headhunter thought I was crazy asking for a certain salary, but I was adamant and eventually found the right job for me and my family."

This is awesome. I wish more women would be aggressive about salary negotiations and not just be grateful for whatever crumbs employers are willing to scatter.

"childcare (2 kids = $22K) does come from my salary because, if anything, it was an expense that we didn't have before when I was home"

This is what doesn't make sense to me. When my husband and I have kids, I will be the one on maternity leave, because I will be the one physically carrying and giving birth to them. Since I'm the one on leave for a few months - during which we will not be paying for childcare - does that mean that childcare automatically comes from my salary? Or does it come from my husband's salary, since he makes less than I do?

Or, since we will be equally responsible for our children, would it come from *both* our salaries, just as the mortgage and car insurance do?

You can have extra tax withheld or just put it in a savings account and then you will get the interest as long as you are not considered underwithholding. Also you may want to talk to a financial planner to see if you can reduce your tax bill.

>>>It's amazing how many people really fight against the fact -- yes, the fact! -- that on average, men make more than women do.Not for much longer I'd imagine. Women are going to university in far higher numbers than men.<

Really? Although women are going to university in ever higher numbers, a disproportionately low number of women are making it to upper management, high level policy jobs, academic positions, Supreme Court clerkships, you name it. The latest figures suggest that at the rate we're going, women might achieve pay parity in 2050. Did you see the news item yesterday about the NAS report blaming plain old discrimination for the dearth of women in academia? And the one a few weeks ago about Supreme Court clerkships? Striking that folks on this blog seem to think sexism has magically vaporized in recent years and any remaining income disparity is purely incidental.

Also striking that folks think highlighting actual gender disparity is sexist itself. What is sexist about pointing out that women tend to have lower income than men, and that when deciding whether to work vs. stay at home, the lower earner will have to weigh marginal benefit (income minus taxes) against marginal cost (child care). Why are we flaying Leslie for framing this as a an issue affecting women when it is, in fact, women who most frequently have to confront this calculus? It's also disingenous to suggest that this calculation takes place in a gender-neutral vacuum where social norms and biases (i.e. that Mommy should be the primary care-giver and that she can stay at home with less judgement than her husband) don't apply. Men have traditionally been the primary breadwinners in our society and the vast majority of them still are, though there are more exceptions every day. The question is, do tax laws (and other social policies) support families in upending the traditional arrangement or are they being punished? I don't know the answer (haven't read the book, am not a tax expert), but what's wrong with discussing it?

The marriage penalty does not penalize ALL multi-income households, only those in which the 2 wage-earners are married. Of course it costs more for 2 people to live separately than under the same roof. The problem is that given changed mores, those who do not marry, whether by choice (heterosexual couples) or necessity (gay couples) get taxed at the individual rate. Btw, this extends to financial aid -- at my oh-so-Catholic law school, I had several classmates who cheerfully admitted that they would not marry until they finished school so they would continue to be eligible for financial aid, which they would have lost had they married their live-in partners! Some family values!

To Joh: The issue is with the formula for the deduction and exemptions. They actually change year to year. What you need to do is go onto the IRS website and use their on line calculator. It will give you a decent approximation of how much taxes and deductions you can claim. I am in the same boat for you. DH files single 0 and I file married 0. We always owe a small amount at tax time. It just has to do with being a decent wage earner. On the flip side, be grateful this is your tax problem. The other side of the fence is getting a tax bill that you can't afford to pay or not being able to make your monthly bills. Count yourself lucky. I do.

To Bird: How does filing sperately help? Is there a earnings threshold where it benefits the filers? We figured our taxes both ways 2 years in a row and we ended up filing jointly both times.

Leslie, You ask how we make employers and laws catch up with today's reality. You yourself are an important, highly visible executive at a big, prestigious company. You're in an excellent position to do something about this issue. So how are you getting The Washington Post to recognize what all working parents face?

"Since I'm the one on leave for a few months - during which we will not be paying for childcare - does that mean that childcare automatically comes from my salary? Or does it come from my husband's salary, since he makes less than I do?"

MomBack2Work put it very well, but I'll explain further-- it's not really a "comes from" concept. Of course all money within the family is the same. However, when looking at whether it is worth it to work, one should weigh the costs of childcare, commuting, etc. against the lower earner's income (in this case, your husband). Under this calculation, you may find that you are essentially paying for him to work, since the costs of working (childcare, increased meals out, business attire, commute costs, etc.) is higher than the income he would receive. You may still decide that your family would be better off with him working, even if it costs you financially, if he is happier working or he feels it would hurt his career too much. But you should still consider the costs of working before you make that decision.

G'morning Scarry! Ready for another energizing day of blog debating? ;-)

I always hear about the "costs of working." These are frequently enumerated as clothes, dinners out, commuting, and childcare; the only honest cost I see is childcare. Families with stay at home parents never eat out? Women who went to work in St. John suits are content to stay at home wearing clothes from Target? At-home parents don't drive the car or leave the house?

I once read an article where the calculated "cost of work" included a computer. As if the family wouldn't have had a computer if the mother had stayed at home. As if the cost of dry cleaning should seriously factor into a woman's decision to work or not.

I completely agree with you MSL.

The Marriage penalty was largely eliminated in the 2003 Tax Act.

To MsL: that is true. But doesn't that only affect lower wage earners. Most professionals that I know make way more then the cost of childcare, commuting, housing cleaning etc... Especially when you factor in retirement and other benefits and future raises. I am not saying it is not an issue. But only an issue for the lower income brackets and maybe some part of the middle class.

I forgot to explain that the "spousal benefit" is only 50% of the wage earner's beenfit. It appears that the commentator is really whining that her mother married badly.

If her mother hadn't worked, she would have been eligible to recieve a spousla benefit equal to 50% of the author's father's benefit. Given the author's comments, I suspect that amount would still have been less than for what her aunt is eligible.

Example:

Uncle's benefit = 1400 Aunt's spousal benefit = 700.

Father's benefit = 1100 Mother's benefit = 600. Mother could elect the spousla benefit but it would only be $550 so SS will pay her the benefit which she earned.

It appears the author's real problem is that her uncle earned more than her mother and father.

Leslie is me, the author of the blog.

To Ann: That is what I was trying to say but you said it more clearly. There is no penalty from SSI due to two people working.

"I am not saying it is not an issue. But only an issue for the lower income brackets and maybe some part of the middle class."

Maybe you're right. I know it affects some of my friends and family. It depends in part on how many children you have, and perhaps where you live. Still, even if it only affects the lower income brackets and some of the middle class, it's worth mentioning.

Am I correct in remembering that Leslie mentioned the greatest numbers of SAHMs are the poor who couldn't get a job that would pay child-care expenses?

AND another thing:

"someone who seems to adore feeling victimized because she is an upper income working woman with children"

Everyday one or more people on this blog feel compelled to comment that middle or upper middle class working Moms don't have "real" problems. I grew up in the rural south as the child of a single mom who had me too young and worked like crazy to put herself through school and make a better life for us-- so believe me, I know what "real" problems look like. I do not understand, however, why the severity of problems faced by poor families means that middle class families don't have real problems, too. I grew up poor; I am not poor anymore, but do I still worry about the cost of childcare-- absolutely! My Mom had to put up with a lot of crummy jobs that didn't make it easier for her to be a parent and for many years she had no negotiating leverage; but does that mean I or any other middle class working women should shut up and lump it rather than negotiating better arrangements? While we're on the subject, how come the "you ain't got real problems" crowd is never very keen to pass better labor laws to help the working poor and blue collar moms (vis a vis issues we've discussed here, like pumping milk on the job, better benefits, paid parental leave, etc.)?

Putting things in perspective can help middle and upper class folks appreciate what they have and count their blessings; but whoever said we shouldn't be constantly striving to improve and make things better for ALL working moms?

Ann, every working parent has the right (and a good reason) to sing the blues sometimes.

Pay for housecleaning?? With what money. Get real

Did you see the news item yesterday about the NAS report blaming plain old discrimination for the dearth of women in academia?

I work in software development. In graduate school, the majority of time I was the only woman in my class. I don't blame discrimination, I blame women for choosing to do "martini majors" or "mrs. degrees." Why aren't there more women in science and engineering? Because they don't want to go into science and engineering. Hell, there were very few American men in my classes too! Professors were delighted to have me in their classes and wanted me to continue onto a PhD. Why? Government grants and project often stipulate that only Americans can work on them (ITAR restricted programs) and professors cannot find enough students to work on them.

The "marriage penalty" is a really tough problem to solve. It happens because we have a progressive tax system, which means that people who have higher incomes pay a higher rate of taxes (not just more taxes but a higher rate too). So when two people who earn the same amount of money as each other get married, they end up paying more in taxes than they did when they were single and living together. That happens because after marriage they are in a higher tax bracket.

The marriage penalty only happens when both spouses earn almost equal incomes. If there is only one income earner, the couple will actually pay less in taxes than a single person earning the same income. This is because there's a larger deduction for a married couple, and a married couple is taxed at a lower rate than a single person earning the same income. (The lower rate makes sense because the married couple is supporting two people on the one income, while the single person is only supporting one person. If the single person had dependents, he/she could be "head of household" and pay lower rates too -- but that's getting a bit complicated.)

So, this is hard to solve without making the tax system even more complicated. Most people like the progressive tax system (though there are a fair number of "flat taxers" out there). If you want to have a progressive tax system, there's either going to be a marriage penalty or a single penalty.

I'd be really happy to hear a better solution to this!

P.S. "Married filing separately" does not fix it either -- if you check that box, you'll probably pay higher rates than if you filed jointly! In almost all cases, it's better to file jointly.

"What, you prefer your aunt not have any Social security after your uncle dies?" "It appears that the commentator is really whining that her mother married badly."

I wish you would find a nicer way to put things, Ann.

Here's a potential scenario (not my aunt's).

Couple A earns 120K. Each member earns 60K and pays FICA on 120K.

Couple B earns 120K, with one worker. They pay FICA on only $90K.

At retirement, each member of couple A can get, let's say, $1K each.

Couple B is counted as putting in more and the earner can get $1,333 and the spouse can get half of that, or $666. So they also get $2K, but they actually paid 25% less into the system through FICA.

Because of the cap on wages for high-earners, two-income families can be hurt.

About the costs of working:

The reason items like commuting, wardrobe costs and eating out costs are included is that they can be associated with work. For instance communting - I will still own the car and drive to the grocery store, however I won't drive 20 miles downtown every week day, I might drive 2 miles to the park but the net is still less. Even though I work full time I still need jeans, sweats and other casual clothes so you may already own the bulk of the wardrobe for stay at home status and a pair of jeans and a sweatshirt do cost less than a suit. As for eating out by being home you should have more energy (or at least more flexibility) to make dinners so you are ordering take out less. Obviously this varies from family to family and job to job, but these costs should be evaluated, just as the cost of future raises, retirement income, career trajectory, should also be evaluated.

About the costs of working:

The reason items like commuting, wardrobe costs and eating out costs are included is that they can be associated with work. For instance communting - I will still own the car and drive to the grocery store, however I won't drive 20 miles downtown every week day, I might drive 2 miles to the park but the net is still less. Even though I work full time I still need jeans, sweats and other casual clothes so you may already own the bulk of the wardrobe for stay at home status and a pair of jeans and a sweatshirt do cost less than a suit. As for eating out by being home you should have more energy (or at least more flexibility) to make dinners so you are ordering take out less. Obviously this varies from family to family and job to job, but these costs should be evaluated, just as the cost of future raises, retirement income, career trajectory, should also be evaluated.

'I blame women for choosing to do "martini majors" or "mrs. degrees." '

Alexandria Mom, an excerpt from yesterday's NYT story:

For 30 years, the report says, women have earned at least 30 percent of the nation's doctorates in social and behavioral sciences, and at least 20 percent of the doctorates in life sciences. Yet they appear among full professors in those fields at less than half those levels.

The report also dismissed other commonly held beliefs -- that women are uncompetitive or less productive, that they take too much time off for their families, and so on. Their real problems, it says, are unconscious but pervasive bias, "arbitrary and subjective" evaluation processes, and a work environment in which "anyone lacking the work and family support traditionally provided by a 'wife' is at a serious disadvantage."

http://www.nytimes.com/2006/09/18/science/19womencnd.html?ex=1158897600&en=3f259eee0c0c6e96&ei=5087%0A

Leslie,

Since the tax/marriage penalty issue seems pretty cloudy do you think you could bring Michelle Singletary back again for a guest column? I looked for a relevant article of hers, but her archive doesn't seem to go back that far.

TO JKR,

Are they comparing PhD in the social and behavioral sciences to PhD in engineering? Are they looking only at base salary? If women professor aren't winning proposals, I would love to see how they prove it is discrimination? In engineering, professors have to hustle research money from commercial sector. Women have a harder time doing this because of the travel involved, but that is their husband's fault. Feminism starts at home.

Lizzie, I totally agree.

"When all taxes and other costs associated with working are considered (such as paying for child care and housecleaning), a woman in a middle-income family can only expect to keep 35 cents out of every dollar she earns."

What income range do the authors consider to be middle-income? I'm sure the answer to that will surprise many of us. It's always lower than one expects.

"As for eating out by being home you should have more energy (or at least more flexibility) to make dinners so you are ordering take out less."

This drives me nuts. I work and cook a multi-course dinner every damn night and love doing it. A friend of mine is an attorney with long hours and she cooks every night because she loves it - she even bakes her own challah for the Sabbath. A SAHM on my hall orders takeout every night because she hates to cook.

It has much more to do with whether you find cooking enjoyable than whether you work. If you enjoy it, you'll make the time, no matter how squeezed your schedule. If you don't, you could have all the time in the world and you will still hit take-out so hard that your 3-yo son doesn't even know it's possible to cook dinner at home.

Lizzie, I think I love you!

Ok, seriously, I always enjoy your perspective and couldn't agree more about the way childcare and other costs get tagged on to the wife's salary - my brother and his wife do that and it totally freaks me out.

On the other costs of working, I do understand why some women/couples think of it that way - we definitely ate more home-cooked meals when I was not working full time, because I had more time to plan, grocery shop etc. My husband just isn't a good meal planner, so now even though he works PT, we still eat out more often.

BUT, even though I see that those types of costs may increase when both parents work, I don't think a parent should make the decision based only on that - there are too many other long term factors that are harder to quantify and can get overlooked.

To JKR,

Thanks for the link! Now that I actually read the article (teehee), I will further comment that many women also leave academia because the corporate/commerical sector pays a hell of a lot more money that academia. Life in corporate america is far easier than engineering and science fields in academia! Publishing alone is a difficult process (for men too I might add). It is all about who you did research with and connections you make in research circles. After spending so many years in graduate school and dealing with the politics (which is unlike anything I have ever seen in my life!), the commercial sector looks far more attractive both financially and for a work/life balance.

Alexandria Mom, I don't get the hostility or refusal to accept that discrimination *might* be at play regarding the PhD question. One of my female engineering professors (I got my undergrad in engineering) told me that in 1980 she was literally fired for having a baby-- they told her she couldn't take off one day-- she ended up having complications from a c-section and came back to find her office door locked. Not one colleague offered to cover her classes. She had to sue to get reinstated. Around the same time, a male colleague was in a car accident and was out for several weeks-- the other professors rushed to cover his classes and he came back a few weeks later to the warm welcome of the department. Now she has tenure and is a well known figure in her field-- but her colleagues, the same ones who let her twist in the wind in 1980, are running the department (and making the hiring decisions).

I know my own experience as an engineering undergrad was that guys at my male dominated tech school, while happy to hit on me after class and call me a b**** to my face if I turned them down, never wanted me working on their teams in class or study groups, despite the fact that I was there on a merit scholarship and got good grades. The female PhD students I saw there had to be rock stars to be taken remotely seriously-- a guy could muddle through without having his presence questioned.

While getting my master's in public policy, some students asked the department chair what they were doing to attract more strong female candidates to the school-- he said, "We've got 3 women professors-- what more do you want?" That's 3 out of 20 in a field where the number of female PhD students is near 50%-- but he felt he'd fulfilled his token requirement. (This at a supposedly liberal elite school.)

By the way, you can download a free .pdf summary of the National Academy of Sciences report here: http://www.nap.edu/catalog/11741.html

But it seems you believe discrimination doesn't exist, so I doubt you'll find it unconvincing.

I know lots of people, myself included, who live in the same house, in an engaged status, who aren't getting married because they feel no need to push themselves into the highest tax bracket until they have kids. We'd rather put extra money saved in taxes into 401K and savings. Considering that many of my friends are doing this, I think people have found this to be an excellent viable solution. In some cases you'd be giving the government a used car worth of money each year, I'd rather give it to a charity if i have to just give it away!! Maybe consolidate debt instead. The funny thing is this is what pushes our family values.

"Second, women tend to make less than men for a variety of reasons. Read the academic literature, not the pop culture Cosmopolitan magazine literature on it, and maybe, you will understand why. Women make different career choices, women choose part time career tracks, women bow out of the job market mid-stream to care for children--there are a variety of reasons. I'm a lawyer, and I look around me, and after the third or fourth year in practice, there are NO WOMEN to be found. I don't need statistics to tell me that women, on average, make less than men in my profession, BECAUSE THERE ARE FEWER WOMEN AT HIGHER LEVELS."

MLS - I'm a lawyer as well and I do agree that there are fewer women at higher levels, although they certainly do exist. (I'm a senior associate at a largish firm. I believe we have more female than male associates, but we certainly have more male than female partners.)

You are also correct that women make different career choices and bow out of their careers because of family. Of course this will result in women in the profession with a lower average income. But your implication seems to be (and perhaps I'm reading too much into your post) that this is the end of the story. It isn't. Women make choices that tend to lower their income, in part, because of the social and fiscal policies in this country. The author of the book seems to be suggesting solutions and ways to change those policies so that they are more friendly to women.

I haven't read the book and I'm certainly not a statistician so I can't comment on the author's "numbers," but the discussion about U.S. policy towards 2 income families is one that needs to happen if we ever want it to change.

I've also seen some attacks about Ann's comment regarding the tax rate for a single person making $90K and two married people making $40K and $50K. I actually believe the tax would be the same for those two households. A better example would be two single people in the same household making $40K and $50K and two married people making the same amounts. The married people will end up paying more in taxes because of the higher marginal tax rate. So it is an issue. I don't know anyone who has actually *not* gotten married because of the marriage penalty, but I do know couples who have postponed marriage for a few years as a result.

http://lawyermama.blogspot.com

First of all, I don't mean to come off as hostile. Second, I do think there is some discrimination. I cannot speak to or comment on what the atmosphere was like in the 1980s. It doesn't surprise me that a female professor would be fired for pregnancy complications. I graduated in 2003 with a Master's. I have a standing offer to get a PhD with a professor I worked with on my Master's. The professors I had were nothing but encouraging. Much of this I think comes down to economics, they really need Americans to come to graduate school in engineering and science. This will help remedy a lot of the "old school" discrimination. Also as the "old school" professors die, there will also be a paradigm shift in attitudes.

I had many, many more problems with foreign male graduate students, who where openly hostile, would not speak to me and refused to include me in our group research. I cannot even begin to post the crap I had to deal with them. They were the worst people I have ever encountered in my life. EVER!

Graduate school and academia is extremely political. Often times, I noticed women did not play politics well. Often times, men didn't play politics well, either. But it is easier for women to claim discrimination than it is to admit they screwed up and hurt their careers. I am pretty sure most women would never address their short comings. (For the record, I had my moments of bad politics. Thankfully, it was with professor who didn't matter.) To make it in graduate school, esp. PhD, you must be a complete masochist!

Again, I think discrimination exists but I think academia (engineering & science), as a whole, is a messed up system for all.

I wasn't saying that because it effects only the lower and middle income earners, they don't have a right to talk about it. Of course they do. What I was saying is that people think this blog is only about upper middle to wealthy women's complaint. The truth it is not. Leslie is bringing up an issue about that does not negatively hurt the upper middle class or wealthy. That is a good thing. I was saying that upper middle to wealthy are not negatively affected. So they should feel lucky. Does this make sense?

Yikes, JKR, when and where did you go to school? I'm hoping it was a while ago and that I can say that times have changed, though from your 1980 story it couldn't be too long ago.

While I was an engineering undergrad ('03) and grad student ('04) I didn't experience that kind of hostility. I might have been the only or one of two girls in my class but I always had people happy to work with me. I know there were sexist professors and students, but they were the minority.

There were few female professors while I was there (my advisor was one of them) and I just counted out of 43 current faculty, 4 are female. Of course this is going to reflect that there were so few women undergrads in my class (maybe 10-15 out of about 200).

On a side note, the class picture from every year back to the 1920s hung on the walls of our department. In my unscientific survey, the percentage of women in the class peaked sometime in the 70s. The numbers started dropping again after that. Anyone have any input on that?

To LJB -- yours has to be the most amazing excuse for shacking up that I've ever seen! I agree that you can't penalize everyone in a shared housing situation -- no way to determine who's a roommate and who's a partner -- but that's EXACTLY why the marriage penalty should be eliminated, period.

Agreed, Alexandra Mom-- I do question my own sanity now that I am vaguely considering heading back for a PhD. And sorry if I came off sounding a wee bit bitter.

The truth is, I think I might've been happier studying something other than engineering-- but that tough-as-nails single mom I mentioned before kicked my butt to "get marketable skills" (when you've lived paycheck to paycheck, the merits of liberal arts education seem fuzzy). But that's a whole other story-- and in the end, though I don't work as an engineer today, it has served me very well to have a technical background.

I graduated in '99, by the way, from a well known southern engineering school which shall remain nameless. And it wasn't all bad :-)

Please DON'T have Michelle Singletary write a guest blog. The other day in a chat she was talking about how proud she was to be a "submissive wife" and have her "husband break all the ties" in disagreements. I can't imagine what a day on this blog would look like with her blathering at its top.

I think to state that women keep only 35 cents of every dollar they earn is disingenuous. How do you arrive at that figure? Anecdotally (natch), I just calculated what I KEEP of my salary, and it is way over 75%. And I pay taxes on it. I get to choose how it is spent. If I want to pay for a housecleaner, then that is how I have chosen to spend my money. If that is the line we are taking, how much money does my husband 'keep'? After all of the deductions (mortgage, cable, cars, clothes, food, fun, etc) then we are in exactly the same boat, because we are married. To purport that a woman is wasting her salary on housekeeping, doesn't the husband also figure into this? Or does he sleep in the car and not get the benefit of the clean house?

As far as taxes go, I think it is comparing apples to oranges when you compare our tax rate to other countries. What do we get for it? No national health care, triple taxation, and corporations not paying their fair share. Countries with higher taxes often get more services. Of course, it could be because they are not spending billions of dollars on war.

Re: Michelle Singletary

Exactly. I prefer not to get financial advice from someone who filters it through her conservative religious beliefs first.

No, not Michele Singletary -
Bring in someone who is less prone to bible-thumping and religious preaching. She is not the only financial person available. I personally like Suze Orman, but she is probably too busy for a blog.

"Recommendations include initiating a benefit system that gives employees more choices and makes benefits portable as well as making the tax system fairer for two-earner households. Sounds good, right? But how do we make employers and laws catch up to modern parenthood?"

How about making health insurance costs for the self-employed tax deductible? Help me out here, finance gurus...this is still not the case, correct?

Of course, all of this makes the assumption that government operates in the public interest. As a lobbyist who works on public safety issues, I can quite firmly say that government does not work in the public interest; it works in the corporate interest. Jack Abramoff wasn't lobbying on behalf of welfare mothers and orphans. As a friend of mine (a lobbyist for domestic violence issues) said to me last week, "There's no money in poverty issues."

I also saw Michelle Singletary's comment about being a submissive wife to her husband. Wow!! Someone needs to talk to her.

Yeah, Michele Singletary does go overboard on the religious advice - and she gets SO defensive when someone calls her out on it!

First of all, doesn't it seem odd that the "statistic" quoted is that women are 59% of the total American workforce?

Second, it's probably heresy here, but I think the bigger problem are outdated laws that assign no value to SAHMs.

dad of 2 always up for the blog!

Proud papa,

I only got student loans. Do you think I filled something out wrong? I'm just asking so I can help my boys! thanks

Sorry for reinventing the wheel. I posted after I had read the blog article, but before I had read many responses.

Michelle Singletary is a strong woman with strong religious convictions. For some reason unknown to me, some religions insist that the man be the 'head of the household' and that the wife 'be submissive.' If you have read much of her writing, you will see that this is probably not the best word for her to use to describe her relationship with her husband. At least, that is my interpretation. Basically, she says that if there is the familial jury is deadlocked on an important family issue, her husband is the one to make the final decision. I know, it is weird to me too, but I guess on those rare occassions we all have in our families that this type of decision comes up, there has to be a tie-breaker. Has never happened to me, but it could, in theory. And then we would go back to the drawing board until we came to a concensus. Then again, I just want a peaceful life. But for my husband not to respect my p.o.v. on a very important topic would be a red flag and then I would have to bring out the big guns. Besides, he readily admits that I am much smarter than he is. I am the one who gets to work part time!)

running,

I'm a woman who went to engineering school in the 70s. I was excited and very hopeful about my career ready to get out and contribute. Working, I faced constant discrimination against women in the field. Even though I got excellent ratings and was respected it was impossible to get put onto new projects where I learned new things. I noticed at my last job before switching to public health that none of the women, no matter how good they were and no matter how much they asked or demanded to be put on innovative projects, were put on these projects. They were put on maintaining existing systems which meant lower pay and no new skills.

Since moving to public health which is now predominantly female it has been completely different. I get to work on innovative projects - I'm not treated any differently. It's been great. Of course, I will also make less because it is a female dominated field even though it is as difficult as the engineering/computer sicence that I did.

I think alot of women who went to engineering schools in the 70s thought that they would have similar opportunities to men. What little discrimination there was at school was fairly mild. Once in the work environment reality hit and I think it has discouraged women from engineering and computer science.

I know, I need to go do something else, but I wanted to point out the article on the front page of this website entitled "A Quiet Break for Corporations."

Anyone up for absentee ballots this election? And every election thereafter?

Re: Michelle S.
It's not just the "submissive" thing. Her blanket disapproval of people living together prior to marriage (yes, I know if they break up it's harder to divide property fairly, etc.), but the advice she gave against pre-nups during her last time was not good advice for good reasons!

I agree that in a spousal disagreement that is deadlocked that someone has to break the tie. But I completely disagree that it should always be the husband just because he happens to have a y chromasome. I think that the way the deadlock is broken should depend on the people, on the relative importance that each person gives the issue, on the effect that the decision would have on each person. And if all else fails and things are still equal, then flip a coin. It is just as arbitrary without being as fundamentally unfair to the woman. I understand that people have their religious beliefs. But I also think that when you are giving financial advice, you should do just that, without filtering and often confusing the issue with religious views that are not relevant to the discussion. I am sure Michelle is a strong and smart women, but the religious bent that her discussions often take only result in alienating some of her audience.

I always hear about the "costs of working." These are frequently enumerated as clothes, dinners out, commuting, and childcare; the only honest cost I see is childcare. Families with stay at home parents never eat out? Women who went to work in St. John suits are content to stay at home wearing clothes from Target? At-home parents don't drive the car or leave the house?

Lizzie

I agree. I've never had to wear clothes, even as a professional, to work that are any different than what I would wear around the house. My commute of 15 minutes has always been less than what I would drive if I had the day off. And, even as a single person, I still make 90% or more of all my meals including lunch.

Conversely, my brother's family with a stay at home wife eats out almost every night. I think a lot of this stuff is very much against married women working and they try to slant it that way.

When I've tried to figure out what my working costs are I've come up with very few.

Rockville, I completely agree. I have read her colomn for a few years now, and she is becoming more forward/assertive/aggressive in her writing about the morals of money. Some women who feel that everyone should live the way they do (married to a man, working, not working, having children, etc) try to inflict their morals on others. It is annoying, but some of her financial advice is sound, but it is also fairly basic (save, stay out of debt, etc.). I think her niche audience does not include me, but I still read her (habit, mostly--I stumbled across her column when she was doing the frugal contest--the winner saved tissue from his job as a grocery clerk to use as tp). Other writers do the same thing, but in a different way. For example, I don't think too many mainstream financial advisors writing for a mainstream publication would advocate avoiding marriage and co-habitation as a way to save money, although it works. They might say to get a roommate instead. I do wonder sometimes why she is so averse to seeing the world as it is. Sometimes marriage doesn't work out. Why stay in a miserable marriage for 60 years? A pre-nup is kind of a necessary evil, especially if you have something to lose. I would liken it to going on a boat without a life jacket or not wearing your seatbelt. Maybe 98 percent of the time you won't need it, but it is better to have it and not need it than need it and not have it.

To dia: while I agree with most of your points. I do think commuting is a real cost of working for some people. I pay about $2,000/year in metro and parking fees. Now, if I was to SAH, I would have some costs for transportation. But certainly not that much. I up keep a car whether I work or SAH. I would have more car repairs and gas giving I stayed home. But I don't think it would be the same as parking and metro fees. There are some clothing costs if you work in a suit enviroment. I do not know too many SAHPs that walk around in business suits. Mainly because they are uncomfortable. There is also dry cleaning costs. I agree with the cooking costs. I do pay more for prepared meals but if I could get away with doing that and SAH, I would. :)

We made a budget when we were deciding if I would stay home, and agreed that he would take lunches in, we would dine out max 2X per week, etc. I had the time to shop for bargains, wait for sales, argue with the health insurance company about denied claims (which we had just paid before, not having the time to deal with it). We didn't feel the need to take exotic vacations as much, since our lives were less stressful. All in all, our cost of living went down by about $500 per month, not including childcare (I use a computer budgeting program, so I was able to keep track).

As in everything, your mileage may vary. But for us there were a whole lot of found savings from having me stay at home.

bkp says

"

Up to $5000 in childcare expenses are tax deductible. Unless you make a lot of money. Daycare runs 10000-14000 per year. The government is saying that one half to one third of that expense is tax free. That seems fair. For families that are really poor, a lot of other assistance kicks in.

I have always viewed the tax laws as encouraging both spouses to work, not the opposite. If one spouse stays at home, he or she gives up both potential income and on their tax return, are not allowed to deduct the imputed value of the childcare, i.e., for tax purposes, services you provide to yourself have no value.

I am not surprised the conclusions of this book are incorrect. You have two people with agendas and a journalist involved. That is not a recipe for robust analysis."

Close but no cigar. Your absolutely right that much of the problem is caused by the asymmetric treatment of labor outside the home which produces cash spent on childcare vs. labor spent directly on childcare. But the asymmetry favors the stay-at-home parent. As you point out daycare costs a lot more than the $5,000 that you can deduct for tax purposes. Assume it costs $10,000. Then to pay the $10,000 to the daycare provider the working parent (even if in the 20% bracket) has to earn $11,250. That's 1,250 that the government takes off the top before the working parent even gets to see a single net dollar of profit from going to work.

Paradoxically, the best way to equalize the treatment of parents who work outside the home and those who stay at home would be to make the stay-at-home parents PAY TAX on their imputed income. (Not a politically feasible solution, but one which would actually create true parity).

Another vote to NOT see Singletary here. I stopped reading her blog when one of her comments to someone disagreeing with her was "I will pray for you then". Blech.

RE: married vs living together. After our last 'surprise' tax bill came due, my wife and I determined if we were single and living together we would be able to keep a lot more of our income than if we remained married. After thinking about it (not seriously mind you) we determined the hassle of divorcing but keeping the status quo for everything else wasn't worth it, though.

Still, when you can get that kind of revelation, it makes sense so many couples choose to not get married.

I find it very annoying that we are *still* saying that the woman's salary is used to pay for things like childcare and housecleaning (and so therefore it is hardly worth it for her to work, etc.) This is particularly disturbing to find in an article that is supposed to be supportive of working women. Childcare expenses are the responsibility of both parents, not just the mother, and it just devalues women to subtract that substantial sum and tell them "Well, you are really just earning 35 cents on the dollar".

Scarry - Somebody mentioned earlier that the system might be broken in that incoming college students (and their parents) cannot easily tell what Aid they are eligible for. Filling out the FAFSA (the federal app for student aid) gets DoEd to compute your financial need. This is a fixed amount based upon the household's financial information if the student is a minor. (It is a crime to falsify it). A school that says their Aid office will meet the students full need (say $25k on a $35k tuition) will make sure the student 'gets' the $25k.

Most schools then decide what proportion to allocate the student out of 3 pots: Federal grants, Federal loans and Workstudy earnings. Those 3 amounts should add up to $25k. The remaining $10k is assumed to be the household's problem to solve (via parents salaries, 2nd mortgage, loan shark, etc.)

Also, schools breakdown as 1) those who make no claims of helping you meet financial need 2) those who claim to help you meet your need as computed by DoEd/FSA and 3) those who claim to help you meet your need as THEY compute it.

Beware category 3. Some of our country's best private colleges fall into this category, my alma mater included. Expect that your college senior will have to borrow lots of money in his/her last year, b/c the school will magically compute that their need is lessened. Private schools do play this game partially to ensure that your kids graduate in 4 years. Year 5 will cost you a ton.

Now lets say you go find some non-Federal aid. Your kid wins a $3,000 scholarship from the boy scouts. The boy scouts send payment to the college directly (most scholarship funds do not put a check in your hand). The college financial aid deducts that amount from the amount of your Federal Grant, then your Federal Loan. In other words, the taxpayers do not extend you a government grant when your 'financial need' was lessened by the amount the boy scouts gave you.

All this is a long way of saying that sometimes winning scholarships often does not lessen how much the family pays, assuming they already get financial aid. (This is why people hear the stories of all this 'unclaimed scholarship money' every year - it wouldn't have helped the family anyway.) If you are in the wonderful position of not needing any federal aid, any scholarships you win then can directly lessen the amount you owe the school.

Here are good places to look for non-federal scholarships: Mom/Dad's company, Mom/Dad's union, student's extracurricular groups, Mom/Dad's alma maters, student's research interests, town chamber of commerce, trusts left to the school by prominent alums (lists of each school's prominent alums can be found on wikipedia), organizations founded to assist mom/dad/student's religion, nationality, gender or race.

And, there are more. This is real research that should be done every year, and Google and Wikipedia will help cut the time drastically. I googled "irish college scholarship" and this was right near the top, for example: (http://www.emsc.nysed.gov/nysssa/AmIrLeg/2006essayapplicationform.pdf#search=%22irish%20college%20scholarship%22)

-Pp.

"Childcare expenses are the responsibility of both parents, not just the mother, and it just devalues women to subtract that substantial sum and tell them "Well, you are really just earning 35 cents on the dollar".

This is so true. My sister and her husband do this, and worse, because they keep their finances separate (they have separate accounts, she pays half the mortgage from her account and all of the daycare), it means that she ends up with no money of her own and is constantly asking my BIL for cash or to pay for things for her, which is so demoralizing and sets up a totally screwy power dynamic. I've heard her say more than once "once I pay for daycare and my half of the mortgage I just don't have much left" but she doesn't want to ask her husband to pay for half the daycare. It totally sucks.

To NewName

Are you Lieu?

"making the tax system fairer for two-earner households"

What a total crock of a statement. You want to make the tax system fair -- eliminate joint returns. Every person who works pays taxes based on their income and their income only. No joint returns. You don't want a "fair tax system" you want special priviliges!

To NewName

Are you Lieu?

Posted by: Sam | September 20, 2006 12:54 PM

Wouldn't answering this in the positive defeat the purpose of taking on NewName?

Yes Sam, I am Lieu. Or Lieu I am. Just kidding. I thought I should have a NewName. Not because any thing that happened on the blog but I found someone I knew recongized me on the blog. I did not want work people recongnizing me. :)

It was mentioned that the childcare is to be deducted from the lower wagerearner, which (whether we'd like to admit it or not) tends to be the wife. When my husband made less $ than me (13 of the 15 years of our marriage), we figured when we had our 2nd child that we would have been better off financially if he had stayed at home. Deducting the child care expenses from his salary and figuring out our take home salary after taxes made us come out ahead if he had stayed at home. But, he didn't want to. But, this was while he was working on a degree and was between "suitable" jobs (not working in the type of job he really wanted), so he didn't want to stay at home with the kids. I can't blame him because I don't know what I would have done if I were the one in the lower wage earner situation at the time.

But, to figure out if it makes sense financially for the lower wager earner to work, these expenses must be deducted from that person's salary.

Of course, other factors may play into the decision of whether or not it makes sense for that person to work.

By the way - there are still many items in the tax law that benefit single individuals. We would each be able to contribute to FSAs for dependent care. We wouldn't hit some of the income caps. My SIL is a financial planner!

The problem with Michelle Singletary, and I'm sure she's a very nice woman, but why on earth would a woman who gives advice for a living say to her readers that her OWN family does not take her advice if there is family deadlock and her HUSBAND decides (a financial decision for example), simply because he has the right chromosome???

OK, I thought I posted this. Sam, yes I am Lieu or Lieu I am. I just changed my name because one of my friends identified me on my blog. So I did not want anyone from work identifying me later on.

And now I've blown your cover. Sorry. But your posts are distinctive. I thought so yesterday when you referred to DH, and when you stated you were a statistician today, that sealed it.

Will promise not to ask the next time I see a post that appears to be from you. So maybe you can take on a new newname tomorrow.

I may have to change my name also. Someone else posted as Sam yesterday.

Have thoughts on this topic, but they've already been stated by lots of others.

"Recommendations include ... as well as making the tax system fairer for two-earner households."

Funny - I don't recall the Post advocating for the elimination of the marriage-penalty in the tax code before. Maybe now? Nah - doubt it.

Don't worry Sam. I don't think anyone in my office actually reads this blog. I just did not want to make it so obvious that is what I do with my free time at work. I was surprised when one of my non work friends said " I read what you wrote on the on balance blog and..."

The problem with Michelle Singletary, and I'm sure she's a very nice woman, but why on earth would a woman who gives advice for a living say to her readers that her OWN f