We Can Do It? How the Tax Cuts and Jobs Act Perpetuates Implicit Gender Bias in the Code

Abstract

In December of 2017 Congress passed sweeping tax “reform” legislation known as the Tax Cuts and Jobs Act. This article highlights three aspects of the legislation that reflect implicit bias in the Code and facilitate the marginalization of women as a result of tax policy that fails to consider underlying demographic data with respect to the equitable distribution of tax expenditures. Specifically, this article analyzes the elimination of the alimony inclusion/deduction regime under §§ 71 and 215 of the Code, the disallowance of a deduction for legal fees associated with the settlement of sexual harassment and abuse claims that include nondisclosure agreements under § 162(q), and specific provisions designed to promote small businesses that exclude the vast majority of businesses owned by women. This article proposes that real tax reform should endeavor to eliminate implicit bias in the Code by addressing the circumstances giving rise to the need for alimony in the first place; the barriers to success faced by women in the market, including discrimination, sexual harassment, and sexual assault; and the circumstances that propel female entrepreneurs toward the types of business models that are excluded from substantial benefits under the Code. In order to effectuate the equitable distribution of tax expenditures and facilitate economic efficiency through tax policy, real tax reform should reevaluate the normative view of marriage, families, and traditional business models reflected in the Code taking into consideration underlying demographic data with respect to the effects of tax legislation on discrete groups of people. Further, real tax reform would adopt a more holistic approach that takes into consideration the interconnected nature of the private and public lives of women struggling to participate equitably in the market and achieve financial independence and economic self-sufficiency.