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Every spring, millions of American married couples engage in a little-discussed administrative duty: filing joint taxes. Originating in 1948, this seemingly innocuous tax policy has evolved into one of America's most overlooked barriers to gender equality. 

The gender gap in America's labor market is driven by more than just workplace discrimination and weak family policies. The tax code itself plays a powerful role in subjecting the lower earner in a marriage (typically wives) to higher tax rates. 

Research shows that this policy, known as joint filing, discourages wives from working exactly when their careers are taking off. And with more women holding down jobs than ever before, more women face the penalties of joint filing than ever before, too.

A complete overhaul of joint filing would hike taxes for most married couples — setting up daunting and likely insurmountable politics. A set of narrower reforms, however, seem possible.

The system traces back to 1948, when Congress passed The Revenue Act, enabling all married couples to file taxes jointly. In a world where most married women were stay-at-home wives, this change was meant to provide tax relief to traditional male breadwinner families. But the newly established system included a built-in penalty for secondary earners that would become increasingly problematic as more women sought to join the workforce.

Here's how the joint filing trap works: Higher incomes face higher marginal rates, meaning a couple’s combined income can push them into a higher tax bracket than if they filed separately. A married woman’s earnings, assuming she earns less than her husband, is taxed at the higher rate determined by her husband's income. Joint filing essentially “stacks” her earnings on top of his.

Let’s say a woman, Kate, who earns $100,000, marries Jack, who earns $200,000, and they decide to file jointly. Together, their combined income of $300,000 would fall into the 24 percent tax bracket for joint filers. But if Kate had filed individually, she would have been taxed in the 22 percent tax bracket, while Jack’s $200,000 would push him into the 32 percent bracket. Put simply, Kate’s earnings are taxed more when she jointly files with Jack. 

Though married couples in the US have the option of filing separately, fewer than 7 percent actually do, as that often subjects households to higher taxes than joint filing, in addition to causing them to lose other benefits. In this scenario, Kate and Jack’s take-home pay would be roughly $5,000 more if filed jointly than if they went with “married filing separately.” 

“While the effects of joint taxation are most acute in early and mid-career, their cumulative impact shapes women’s lifetime economic trajectories,” Mariacristina De Nardi, an economist at the University of Minnesota, told Vox.

Recent economic research has concluded that eliminating joint filing in the US would significantly increase married women's workforce participation throughout their whole life.

By the 1970s and 1980s — both to advance gender equality and to boost overall employment — nearly all OECD countries reverted back to individual tax filing systems. 

Sweden, which abandoned its joint filing system in 1971, saw significant increases in married women's employment, as did Canada, which shifted in 1988. In a telling contrast, when the Czech Republic bucked the international trend and introduced joint taxation in 2005, the number of married women in the workforce went down.

“The joint return was never about helping women — it was about helping white guys pay less in taxes,” said Dorothy Brown, a tax law professor at Georgetown University.

The path to reforming joint filing in the US faces unique challenges. Today, any complete elimination of the practice would likely be politically dead in the water.

The US health care and retirement systems have evolved for decades around joint family benefits. This “lock-in” effect would be difficult for millions of couples to reverse, even if Congress abandoned joint filing tomorrow.

Still, more targeted reforms might work. During the Reagan administration, Congress briefly implemented a tax deduction for secondary earners, essentially reducing the tax penalty on wives. Some economists have proposed bringing this idea back.

Michael Graetz, a tax professor emeritus at Columbia and Yale law schools, advocates both reinstating the secondary earner deduction and expanding child care subsidies. These changes would help protect secondary earners at a crucial career juncture, when child-rearing responsibilities often force women to reduce their working hours. 

Tax policy might not be the first thing on the agenda for most feminist activists, but the case for rethinking joint filing is strong. As De Nardi's research demonstrates, joint filing still poses a major barrier to women’s participation in the workforce, even for younger and more educated women.

"Over time, political inertia and the complexity of reforming entrenched tax systems have likely contributed to its persistence," De Nardi said. "Policymakers and the public may also underestimate the long-term costs.”

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