Tax, Public Policy Hit Second-Wage Earning Women Hardest

Women working alongside their husbands to help "bring home the bacon" may lose more than half of their income for doing so.

I just returned from the Conservative Women’s Forum Luncheon, a monthly event sponsored by the Clare Boothe Luce Policy Foundation and hosted by the Heritage Foundation. Today’s featured speaker was Kimberley Strassel, a member of Wall Street Journal Editorial Board and co-author of a new book titled, "Leaving Women Behind: Modern Families Outdated Laws," which details the economic burdens placed on women in the workplace due to poor public and tax policy.

Strassel gave an eye-opening speech, explaining that 75% of women ages 22-55 are working and these women pay some of the highest tax rates in the country. She said when a married woman becomes a second-wage earner her income is added to her husband’s tax rate. Women working average jobs could be taxed at a rate higher than most millionaires.

So, as Strassel explained, between taxes, childcare, and extra fees related to not being in the home, a married woman with children keeps about $0.35 for every dollar she earns.

When tax and public policy laws were originally instated, they were catering to a male-dominated, one-wage earner workplace, she explained. This wasn’t due to some manly power trip, as feminists would have you believe, but because that’s just the way it was back then; second-wage earners weren’t a determining factor.

The "benefits" of social security aren’t felt by many women in the workplace either. This is another problem Strassel said needs to be fixed.

Career changes are more commonplace than they used to be. It’s no longer expected that people will work for the same company throughout their lives. But public policy hasn’t been adjusted for that. For example, Strassel said, if a woman works in four jobs for 10 years each, she will receive less than half the retirement benefits she would if she had worked in one job for 40 years.

She said widows with children may have it the worst. If they choose to have a job instead of living off merely their social security benefits, they will be charged a marginal tax rate of 87%. (Interestingly, women who are married less than 10 years won’t receive a cent of their ex-husband’s social security benefits).

Strassel said she’s found that more than half of the women in the workplace would rather have time compensation instead of pay compensation when working more than a 40-hour week. In 1997, then-Sen. John Ashcroft made a valiant attempt to pass a bill that would have allowed for more flexibility in the work place for women, but without success. So far the federal government has only secured this right for its own employees, allowing them comp-time and flex-time since 1978.

Policy-makers would do well to focus on these "real" issues — things that average women actually care about and feminists tend to ignore. It’s clear the playing field needs to be leveled. Strassel suggests that a flat tax or national sales tax would help, but the quickest fix (and most basic) would be to allow spouses to file separately for benefits and taxes. Also, she said it would be best if benefits could be purchased and taken from job to job and private savings accounts were put into place. I agree.

And as Strassel said, "These kind of changes wouldn’t just be great for women — they’d be great for the economy."

For more information, examples and insights, pick up a copy of Strassel’s book (written with Celeste Colgan and John C. Goodman), "Leaving Women Behind : Modern Families Outdated Laws."