Thursday, March 29, 2012

The $67 Billion Feminist Tax that Women Primarily Pay

Follow me closely on this one because it takes some explaining, but I'll try to make this as clear and as simple as possible so you see my point.

In order for something to be taxed there must be some kind of transaction. You get a paycheck, you sell some stock, you buy gas, you sell a house, etc. etc. That transaction is recorded not just in company or government records, but at banks, so if you were ever to get audited, there would be some kind of proof a transaction did indeed occur. There are only two ways to avoid this taxation:

1. That transaction is done in cash (and therefore no banking or electronic proof that transaction occurred).

2. You barter for services or goods (again, no electronic record of any transaction).

Now, that being said, the IRS still requires you to report any cash or bartering transactions so you can pay taxes on it, but they're relying on the honor system in these cases. Naturally, there's an incentive to make transactions via cash or barter, resulting in an US underground economy estimated to be anywhere from $500 billion to even $3 trillion.

When you think "underground economy" you usually think drugs, weapons, maybe contractors doing favors for one another, but you rarely think of housework as part of the underground economy. Basic house maintenance, upkeep and cleaning is viewed more as a chore and even the most ardent of IRS agents I doubt would advocate somehow requiring homemakers reporting whether or not they vacuumed that year or mowed the lawn.

However, they don't really have to. Feminism has already done that for them.

Again, before I continue on, let me get the disclaimers out here so we can blunt the knee-jerk reactions from the non-thinking reactionaries. Let me state that I for one never viewed house work as "beneath" anybody. I never viewed what could be considered traditional "women's work" beneath traditional "men's work" and to this day still am looking for proof where society placed less value on traditional women's roles than they did traditional male's roles. Truthfully, I believe having "men's" work and "women's" work categorized was really more of a symbiotically beneficial division of labor allowing both groups to produce more than had they tried to do both jobs, but that is for another debate at another point in time. For purposes of our discussion now, I view traditional "women's work" just as vital as traditional "men's work," while at the same time agreeing there are instances where the traditional roles could be reversed that would also be beneficial.

But getting back to my original point, feminism has indeed brought a lot of the unspoken labor involved in house work, house maintenance and traditional "women's work" out of the world of barter and into the official (and now taxable) economy.

How?

Well consider this.

1950's home maker Sue spends her day cleaning and taking care of the house. Washing dishes, doing laundry, cooking meals, and (more importantly) taking care of the kids. All of this has vital value to the continuing function of the household and thus the economy and thus the country, but because she is not paid to do it, there is no way to put a market value on it and therefore no way to tax it.

But today, many thanks to feminism, women are no longer "shackled" to the doldrums of the 1950's housewife. She can go and pursue her own education, her own career, have kids, have a home, have a car, pursue her hobbies, run for president, fly to the moon and cure cancer. She can do it all and she can have it all because she has moxie and grrrrrl power (TM). And so, in 2012, Amy is "having it all" as she works as a lawyer in a prestigious DT law firm, with her 3 children, her house payments and car payments, as she participates in the local wine club, and goes out and partays as she is single because her ex-husband was a jerk.

The question is, naturally, if Amy is out doing all these things, how does she take care of her house and her children?

Simple, she doesn't. She pays somebody else to do it. She outsources all these things.

Uh ohhhhhh!

"Did you say, "outsource," Captain?"

Yes, yes I did. And you know what that means. That was a transaction. A transaction that is recordable and now, thusly, taxable.

In short, by kicking the homemaker (whether it was male or female, it doesn't matter) out of the house and into the working world you no longer have a willing and amiable spouse to stay at home and do all that work for "free." You have to pay somebody, and NOW you get to pay taxes on it.

How much? Well, shucks howdy, a cool $67 billion every year ladies and gentlemen.

How did I come about that figure? With my patented "Super Awesome Economic Genius," of course!

If you go to the NIPA accounts and look at personal consumption expenditures and add up all the various "household services," "day care," "cleaning services," and other things that would have been done by a traditional housewife, you get $169.3 billion spent on everything. But in the 1950's, that wouldn't have been a transacted number. That would have been a theoretical value applied to the barter. But since $169.3 billion has actually been transacted, you need to apply the roughly 40% tax rate to that amount, which results in the $67 billion tax bill I estimated above.

Now who pays this tax?

Disproportionately women.

Men were already working in the official economy and therefore paying income taxes. It's not like male labor force participation jumped since the 1950's. But to pay for the outsourcing of house maintenance, home keeping, child-rearing, etc., this bill fell on women who were now on their way to having it all. Women were now not just working and paying regular income taxes, they were now paying that extra $67 billion in taxes to essentially free them up from those horribly oppressive traditional roles so they could pursue their careers.

However, this brings up a funny "chicken or the egg" observation.

Often times I will hear people (not just women, but men too) say,

"Well, you need a two-person income to support a family today. It's impossible to have a stay at home parent."

Really?

Is it that you need to work two jobs to pay for everything, or is it that "everything" costs so much because it was cheaper for one parent to stay home instead of paying $22,000 a year for day care, $10,000 a year for a cleaner, and an extra $12,000 a year for eating out at restaurants because nobody has time to shop for groceries let alone turn them into meals?

Sadly, today the point is moot. Society, in voting in a bevy of social programs, has made the option of a parent staying home nearly impossible. Too many government programs exist today to accommodate the two-working-parent model that if you decide one of you will stay home to rear children and take care of the house, you're stabbed on property taxes, sales taxes, and other non-income tax related levies. You are also forfeiting "free" government programs that have taken over some of these traditional housewife duties.

However, the fact there are so many government programs brings up two last, but wickedly ironic points.

Point 1 - Cleaning the house, doing the dishes, etc., etc., is one thing. But the most expensive item that was bartered for back in the olden days was rearing children. Society, in all of its wisdom, has effectively outsourced that to the government. You have day care, pre-school, early childhood development programs, high school care for teenage moms' children. You could even argue elementary school is largely a baby sitting operation. And with the early-morning school programs and after-school programs, you can hardly argue it isn't. You can pretty much just go and have a child and after a bit of maternity leave, drop the kid off at some school, institution or daycare and the government will either subsidize it or outright pay for it. Thank god, you don't have to deal with that icky, yucky, gross child of yours, let alone RAISE that darn thing! Whew! Onto your masters degree.

But who then raises your child?

And here is the wicked part.

Point 2 - Though not always, predominantly other women take care of your kid. Amy the lawyer or Kelly the engineer would be one thing in that the economic argument could be made that in outsourcing their traditional housewife duties, they COULD make more as an engineer, pay somebody else to maintain the home, pay the extra "feminist tax" on those transactions and STILL come out ahead. They and their husbands could make bookoo coin, fly around the world, gallivant and drink wine, and heck yes, more power to you, AS LONG AS YOU DON'T HAVE CHILDREN. However, that is not the case in the majority of working women. The majority of working women are not only NOT engineers, the majority of women DO want children.

So what ends up happening?

Women, in droves, disproportionately major in "early childhood development," "education," "child psychology," "sociology," "social work," and a bevy of other worthless degrees to do what????

Take care of other womens' children.

Not only do you NOT get to take care of your own children, you get to work to pay the taxes to pay other women to take care of yours (and the taxes needed to employ this veritable army of social workers is infinitely more than $67 billion).

Of course, this is all good. We're all empowered. We're all "having it all." We're all happy. I'm sure the government does a much better job at child rearing than actual mothers (or stay at home fathers) do. Thank god we abandoned traditional roles that somehow developed (for no reason whatsoever) over the millinea of human history. Otherwise there may have been some longer-term consequences that would dwarf the mere $67 billion tax bill. And that certainly isn't possible now, is it?

20 comments:

Mrs. N said...

Thank you for explaining this "tax" so clearly. My background is in property management (luxury high rise condos and co-ops) and I applied the skills used in my former profession to my housekeeping when I left the workforce to raise a family.

Being a believer that you can't have a conclusion without data metrics I set up a spread sheet when my husband and I were exploring my leaving the workforce to raise children.

Once you factor in the outsourcing of childcare, housekeeping, and meals out you can factor in the other costs of a two income household. Items such as professional clothing, another car (and the higher insurance, registration, repairs, and the cost of renting another parking space), professional manicures and hair styling to look "professional", etc. add up quickly. Most of these costs are less expensive for men than women - for example; there isn't the expectation that men have manicured nails, a weekly expense of approx $30. A good professional man's suit will be in style for years, a typical expensive "professional" outfit for a woman will be out of style in a year.

Additionally two incomes usually places the family into a higher tax bracket. You are working more to pay for more "services" only to have to pay more taxes too!

I encourage all families to review their finances as though they were running a business. Many women will discover that working is like running in place.

Of course we (as a family) do not appear as well off as other families around us. However, we are in much better financial and emotional health. One income forces you to be frugal and to plan in advance.

continued...

tspoon said...

Technically, yes. Women are those primarily paying this 'tax'. Realistically no. Primarily Men are paying it because primarily men produce anything of value. The mechanism for transferring that value to females is well documented, and arguably less efficient than previous mechanisms used. For females it has the undoubted advantage of not featuring any requisite transfer in the opposite direction of something possibly of value to males.
I'm not sure if this makes obama into robin hood or a pimp. On the one hand he takes and redistributes according to his list of worthy recipients. On the other he then takes that which was redistributed back again, taking his cut from the 'emancipated' females.

Captain Capitalism said...

Mrs. N,

Something also tells me

1. Your kids probably are more likely to visit you in a nursing home.

2. Are LESS likely to end up in trouble, be it at school or the law

3. Dare I guess you are happier spending time with the children than you would be at the office?

Of course feminists will shoot us both if you answer truthfully.

;)

Cpt.

Mrs. N said...

continued...

Most importantly, our children are raised by us - not outsourced to a social engineer who answers to central planning. We control who our children play with, what they watch, who has access to them (a major safety concern that many parents are much too lax about), and my Husband and I get to fulfill our "American Dream" of raising a family free from the static interference of the prevailing zeitgeist.

Additionally, when the division of labor is split into a "wage earner" and a "support worker" (generally called the housewife) more efficient household management can be achieved further reducing your outsourcing and portion of your income that is confiscated as taxes.

This concept of barter division of labor is best for the household bottom line and worst for an ever expanding government that is desperate for tax revenue as it prevents government theft of not just taxes on wages but sales taxes too.

For example - We live in Chicago and since I stay home with our daughter I am able to "garden" as a hobby, something I enjoy very much but also a hobby that saves us money. I grow all of our herbs (rosemary, basil, oregano, chives, thyme, etc.) in a container garden about the size of a king size bed. Since herbs are essentially weeds, I grow enough to run large batches through the dehydrator and seal in airtight jars to have delicious fragrant herbs for the winter. A small plastic clam shell package of organic herbs costs a little over $5 at the store and you have to use twice as much since the herbs are so old.

I also have time to buy bushels of organic produce from the wholesale produce market in the summer when prices are very low and prepare foods (ketchup, pasta sauce, jelly, jams, etc.) for the winter when the prices are high. I pay tax only on the wholesale price and I don't pay retail markup!

My family eats organic produce for less than most families who are forced to live on "fast food". My husband doesn't have high blood pressure or cholesterol and my children are not overweight and diabetic.

I also participate in direct purchases of beef, pork, and chicken directly from a farmer. I pay him for his organic, free range meats and he arranges for me to pick it up from the slaughterhouse. Healthy food for less than unhealthy food and I support a family farm. We have a years worth of food for every member of our family. If my husband lost his job today we would have enough in savings to pay for our housing, utilities, clothing, etc. and we would have enough food to eat without even touching our savings. This lifestyle is the way things used to be, even in dense urban areas.

Women would be amazed at the "extra" money they would have if they stopped working for pay and started working for their family. I suspect a lot of the fights about money, exhaustion at the end of the day, and such would not happen.

Of course I have to put on my tinfoil hat and say there is a reason the current system encouraging two incomes is set up the way it is. There is a method to the madness.

Pat Sullivan said...

Regarding Mrs. N`s comments. Very few people are able to understand, what you are talking about. I have had this discussion with many people.
They are shocked, when they realize the fiscal results of their actions. The really big point; is the cost of the family help, has to be paid out in after tax dollars.
So unless both parents are earning very high income levels, it is not worth it (as you just explained).
But most people will not admit to the facts. They respond by telling you, "yes but I would really miss working".

Mrs. N said...

Yes Captain! You are again very insightful (and correct).

It is much more enjoyable to be home finger painting, crafting, cleaning, cooking, with your children than it is to be getting stomachaches about deadlines, productivity, and team building exercises! Scrubbing the bathroom toilet once a day is nothing compared to the migraine inducing "bad day" at work.

Put on your body armor - I strongly suspect that there are hormonal reinforcements or feedback loops that encourage women to seek out a lot of close contact with their family. Most "depressed" women really are lacking enough close physical contact with their husbands and do not have enough prolonged time with their children.
Of course no one will study this possibility as it would be oppressive to women and it would sell fewer drugs to those same women.

Captain Capitalism said...

Mrs. N,

You also bring up a good point about something my girlfriend does and that is save coupons.

People laugh, but one of the primary benefits of having somebdoy at home is they increase your purchasing power IMMENSELY by looking for the best deals and using coupons and such like.

It really pisses me off how feminists "criminalized" the vital role "traditional" women played in the household.

Captain Capitalism said...

Ha! Let them be miserable. They chose their path and jacked up my taxes. Hope they enjoy socialism.

The Angry Gen Y'er said...

Yep great post. Once again you clearly state to my why I want to GTFO of the Western world entirely. If not just for the police-state, but to avoid the femnazis.

Paul said...

Well Cap'n, it doesn't quite work that way up in Canada. Here, child-care expenses are one of the few remaining deductions that come off the top, that actually reduce your net taxable income and therefore in my case I get about 50% of my expenses back in a tax refund.

This obviously encourages more working women, as the biggest savings in your calculation regarding staying at home is childcare. It also means that feminist tax is not so primarily paid by women here, because this tax rebate will primarily benefit them and the government will have to make up from another revenue source.

Captain Capitalism said...

Agreed, but you throw in all the government social programs you have to effectively raise/deal with other people's children, and I guarantee you it easily outstrips the tax benefits. We get tax deductions here too, I just didn't want to delve too deeply into the trillion dollars per year we spend on unnecessarily raising/dealing with other people's children/problems.

Ping Jockey said...

Mrs. N --

"Women would be amazed at the "extra" money they would have if they stopped working for pay and started working for their family."

But if they stopped working outside the home for pay, they would be 'oppressed' and couldn't show everyone how 'strong' and 'independent' they were, would they?

--sarcasm off--

You are a wise woman, Mrs. N., and more importantly, an independent thinker, too -- the same traits I value in my girlfriend. I hope your husband and you always value each other for the wonderful relationship you two share and the family you have.

But don't be surprised if you get nothing from hateful insults and contempt from feminists -- after all, you're not unquestioningly following their program, and they can't have that!
For all of feminism's talk about 'independence', the chief thing feminism wants from women is unquestioning obedience.

daniel_ream said...

My wife worked at a day care briefly, and one of the workers there had her two kids in the same day care. Even at the employee discounted rate, the money she was paying was more than her take-home pay from the job at the day care.

It was actually costing them more money to have her go and work at the same day care she put her kids in - in a different room, because she's not allowed to supervise her own children - than to stay at home with them herself.

Oh, and also - in Canada.

Aurini said...

My sister works in the daycare 'industry', so I'm privy to some of the inside knowledge.

One of the things that really stood out to me is how bureaucratized the whole thing is. Any time one of the little retards injures themselves by falling off a chair, or running into a wall, they have to fill out an Incident Report. Naturally this leads to overprotective paranoia. These wonderful little snowflakes just can't be allowed to feel the slightest bit of injury.

Next you get the cattiness which women always seem to bring with them into the workplace; my sister has to 'hide' that she smokes on her breaks (can't let the little darlings no about EVIL CIGARETTES), but when a coworker yelled at her for taking her smoke break in front of the little darlings, it wound up with smoke breaks being banned.

Personally I'd be more worried about the kids seeing adults behave like children, than seeing one of them light a dart.

In her personal life, my sister winds up being overprotective of my nephews. Her definition of risk and danger has mutated into the corporate definition - liability rather than true care.

The whole thing just creates a poisonous environment for children, parents, and even the workers - my sister has a degree in programming (or html or something), but with all the government cheese she makes more watching other people's brats.

People's inability to see the big picture is astounding.

Izanpo said...

Cappy...this was an outstanding entry! Serious, I'm not buttering your ass here - but the theme you've explored here has some serious book potential. Please give it some serious consideration!

PS....Rumpie is distilled in Canada! We're not good at much, but we do booze right!

Anonymous said...

Mrs. N, do you have a younger sister?

Mrs. N said...

Ping Jockey,

Having been born (early 80's) after "feminism" was the fashionable social cause, I avoided much of that particular brand of brainwashing. Free to be you and me was more of a cringe worthy too earnest punchline than a manifesto. During my adolescence girl power was just a product marketing gimmick used to sell everything (from punk music to cars). I didn't realize it was supposed to be serious until I was in college.

My husband and I will be together for our entire lives. We just do not believe in divorce for any reason. I hope you and your girlfriend are too. Life is so much more pleasant with a spouse.

I have been on the receiving end of a few veiled insults. The ever popular, "What DO you do all day?" with that emphasis that implies that I must do nothing all day - is about the harshest most can come up with. I like to answer that I put the children in the basement so I have time for pinterest. If you say it deadpan enough no one is sure if you are joking or not. Once in awhile another woman or some "sensitive" enlightened man will bait me and ask questions about if my husband would "allow" me to cut my hair or if can I wear pants. I delight in coming up with absurd answers to these types of dumb questions. "Yes, I am allowed to cut my hair but only if I let my armpit an leg hair grow out - it's part of our religion." is a good answer or "Of course my husband lets me wear jeans, it's my eldest sister wife who whips me with a belt if I wear mens clothing." *evil grin*

Then there is the (woman's weapon) left handed compliment that can pop up once in awhile but I generally don't come into much contact with women who would rather work instead of be home with their own children - even if they are currently working, they would prefer not to. (Duh, right? Work is stressful and anyone with two brain cells can see most daycare workers are the bottom of the barrel - at least in my area.)

My husband receives most of the derision and contempt for (insert gasps of horror here) "making his wife stay home" as if he physically handcuffed me to a radiator every morning right after drinking his coffee and before he left for work. Until people *cough* (female coworkers) meet me they assume I am an illiterate oppressed child bride (my husband is five years older, there really is no age difference) who wouldn't be able to log into our bank account since I was never taught math, or how to drive, or use a cell phone. *laugh*

Of course, he could care less about assumptions others make about our home life. He has a really dark sense of humor and I know he gets a real kick out of it when "people" meet me and I am "normal".

Anonymous said...

Mrs. N said

But if they stopped working outside the home for pay, they would be 'oppressed' and couldn't show everyone how 'strong' and 'independent' they were, would they?

I hear you Mrs. N and I agree with the Captain - heck I've made this argument myself. One small quibble though: I work not to demonstrate my feminist bona fides but because there is a net financial gain to me, even after paying for childcare and other outsourced tasks (and the amount that I get to keep increases as my childcare expenses decline, particularly since I accrue a pension and my husband does not). One of my children has specialized educational requirements and my job is how we pay for them (privately, without relying on any subsidies). I have yet to meet a working mother who has not engaged in some sort of cost/benefit analysis before deciding that their family is better of if she takes on some sort of paid employment. Now, I agree that it's the taxes that are killing us - without them I really could stay home - but working women are not really that confused about the personal financial side of the equation as the blog and some of the posts imply. Thanks

Mrs. N said...

Anonymous 4:29 AM,

I wouldn't prohibit women who want to work from participating in the workforce for wages. There are so many women who do NOT want to work but feel that they HAVE to work in order for their family to survive. Many men feel that their wives MUST work or the bills will not get paid. I am not talking about minimum wage earners, I am referencing couples who both work professional jobs and are paid a good living. I was really excited and thrilled when I read the post by the blog author (a male) that explained in easy to understand terms what I have tried to explain to others. From now on, I can just send a link. *grin*

The main point of my posts is that family finances should be evaluated and run like a business. Decisions should be based on metrics and cost/benefit analysis (including emotional considerations). I agree with the Captain that in most cases barter within a family shelters your "wages" and productivity from confiscatory taxes that are then used primarily to fund other families. Why should my or my husband's labor - literally hours of our lives we will never get back be taken from us and given to another family (without our consent)?

Your family (business) has different circumstances than mine. We don't have the operating overhead you do (niche education requirements) and I was not accruing any pension benefits when working.

I made a very comfortable salary and would have had money left over to cover outsourcing expenses. I would have netted approx $28,000 annually after all expenses and taxes without counting on performance bonuses. 28k is just not enough income for me to work 60+ hours a week and be on call 24 hours a day. Many days I would have left the house before my children were awake and returned after they were in bed asleep. What kind of life is that? Considering my husband is also on call three days a week, it only made financial sense for me to stop working. I wanted to be with my child (and later children). My husband loves his children and would do anything for them but he doesn't want to be with them all the time. (He likes showering for more than 3 minutes and going to the bathroom alone. An accomplishment no stay at home mother with small children can claim!) So it also made emotional sense for me to be the one to stop working. Biology is destiny.

Also where your business is located (where you live) plays a large role too. I am guessing that you don't have to rent a parking spot for $200 a month just for the privilege of paying expenses for a car to drive to and from work. Public transportation infrastructure in Chicago exists but it is safe only during very limited times of the day.

I have family members who live where high quality childcare is available for a reasonable price (mostly stay at home Moms who care for one or two children other than their own for pay). That doesn't exist where I live. Childcare workers here are the very bottom rung of society. That doesn't make them "bad" women, it does make them the wrong people to leave a child with. Why? Because any woman who is even slightly above the bottom rung can get a "better" job or decides it is more beneficial to just stay home with her own children.

Finally, I have met a very large number of women and men who are confused and truly stumped. They have no idea why with two people working professional jobs they are further in the hole at the end of each month. I managed three departments of employees where a large number of them were unable to understand the actual cost of working. They were not dumb people, they just were provided with faulty information/metrics.

Ping Jockey is actually who the quote should be attributed to - although I agree with it.

I agree with a previous commenter that this subject matter has "book" written (pun!) all over it - especially from an economists vantage point. Thank you for your indulgence with my many comments Captain, this is a subject close to my heart.

Miklos Hollender said...

Dear Captain and Mrs. N.

I have to partially disagree. The way forward for married women seems to be part time. 20 hours a week means housework doesn't have to be outsourced, yet she won't feel so locked up between 4 walls, can have some social life at work and feel some other kind of achievement than a household robot etc. And part-time jobs are very low taxed where we live (Central Europe). Best of both worlds?