Thursday, April 8, 2010
Stephanie McMahon (Cincinnati) presents Tax Filing in the U.K.: A Guide for the U.S. When Eliminating the Marriage Penalty at Indiana-Bloomington today as part of its Tax Policy Colloquium Series organized by Ajay K. Mehrotra. Here is the abstract:
The United States is one of the last countries to use the joint return for married couples’ tax filing; most other countries have adopted individual filing. In 1990, the United Kingdom completed its transition from a tax system that required husbands and wives to file as a marital unit to one that requires individual filing, and so it has two decades of experience with the new regime. Although the U.K. ought to be a rather obvious example for the U.S. to consider if the U.S. government decides to change its filing requirements, little research has been done on the British change in policy. Examining first what makes a valuable international comparison, this paper then reviews the origins and development of the mandatory joint return and the forces that drove the change to individual filing in the U.K. Perhaps most importantly, the paper also appraises the consequences of this revision of British law. Evaluating the change in the U.K., including the improved economic position of many wives and the increased incidence of tax avoidance, this paper explores its implications as a model for the U.S. In doing so, it urges consideration of the costs as well as the benefits of changing tax units.