by Tessa Davis
For most Americans, election years and filing deadlines (for many, an otherwise lovely spring day in mid-April) are the few times we give much thought to the Internal Revenue Code. Lost in the minutiae of deciding whether to itemize or take the standard deduction, determining eligibility for credits, or trying to track down the statement the mortgage company sent so TurboTax can calculate your home mortgage interest deduction, the grander aims of the tax system fade into the background. The intricacies of the Code are not, however, simply byzantine rules meant to confuse and frustrate, but rather are the result of the best and worst impulses of how we, as citizens and human beings, treat one another.
When the Trump Administration released its “2017 Tax Reform for Economic Growth and American Jobs” one-pager, it articulated four goals: 1. “Grow the economy and create millions of jobs,” 2. “Simplify our burdensome tax code,” 3. “Provide tax relief to American families—especially middle-income families,” and 4. “Lower the business tax rate from one of the highest in the world to one of the lowest.” In any tax policy course, students are taught that the system has at least two goals: raising revenue and advancing social policy. Tax policy scholars evaluate the tax regime in light of those goals and with three common questions in mind: is a given provision or set of provisions administrable, is it efficient, and is it fair? As other tax scholars have noted, the Administration’s “plan” is thin on details, substance, and reform, but it does offer an opportunity to examine the extent to which taxes are, ultimately, a story about how we view and treat others.
The goal of reducing the tax burden on families may seem uncontroversial. Yet the definition of family within the Code is, in fact, the subject of a great deal of controversy.
Consider the Administration’s third stated goal of tax relief for middle-income families. The document suggests three means of achieving that goal: reducing the number of tax brackets, doubling the standard deduction, and “tax relief” for families with children or other dependents. With the exception of doubling the standard deduction, these means are vague and in no way guaranteed to benefit the intended families. Nevertheless, the goal of reducing the tax burden on families may seem uncontroversial. Yet the definition of family within the Code is, in fact, the subject of a great deal of controversy.
Early in the semester of each income tax course I teach, I assign an exercise to students that I preface with the assertion that they do not know what family is, at least not for the purposes of the Code. In one moment, siblings fall within the family circle and in the next, they are pushed out. In 1948, due to the outcome of two important Supreme Court cases, Lucas v. Earl and Poe v. Seaborn, and the different property law regimes of common law and community property states, the United States shifted to a joint filing system for married couples, formalizing a married couple as a familial unit in the tax code. Relatedness became a means of conveying benefits, as well as one of policing bad behavior. A family’s taxes might decrease after marriage (the so-called marriage bonus) or upon having a child, for example, while the kiddie tax of the late 1980s targeted revenue reducing income shifting from parents to children. Whether to provide tax reductions or to shore up the tax base, such rules that relied upon concepts of family in identifying their targets had, as a threshold matter, to decide who counts as family. Until 2013, same-sex couples were excluded from the Code’s concept of family per operation of the Code and the Defense of Marriage Act. Unmarried couples and others lacking a legal signifier of their relationships, however much they may resemble families with legal status, still fall outside the Code’s concept of family. For such families-in-substance, the tax reductions for caregiving (tax expenditures in the language of tax policy) available to many are unavailable to them. Though the specific tax consequences of falling outside the Code’s definition of family turn upon a given family’s particular circumstances, the social import of the exclusion is universal: family does not include your family.
By asking the person without caregiving responsibilities to pay more tax than the family with the same income, we allocate the shared responsibilities of government differently in the name of fairness.
The impulse to provide tax relief for caregiving reflects a concern for the caregiver’s ability to pay tax. Our tax system uses income as its base, but the same income to two different individuals may provide different levels of well-being. An annual income of $60,000 likely affords a single person with no dependents more expendable income than the same income does a family of four. In the language of tax policy, the individual and the family have different abilities to pay tax. Our progressive tax system reflects the idea that as an individual’s income increases so too should her tax rate and liability. Tax expenditures, like the child tax credit, account for the fact that income is an imperfect metric. Stated differently, the family of four may need to keep a bit more of their income to pay for the necessities than does the single person with the same income. By asking the person without caregiving responsibilities to pay more tax than the family with the same income, we allocate the shared responsibilities of government differently in the name of fairness. Returning to the metrics of tax policy analysis, in search of a fair allocation of taxation, we frequently sacrifice simplicity.
Which families warrant tax relief in the view of the current administration? If then-candidate Trump’s tax proposal is instructive, only so-called traditional families. As a candidate, President Trump released a tax proposal that included repealing the head of household filing status—the status that aims to reduce the tax liability of an unmarried individual with dependents as compared to their tax liability if forced to use the tax tables for an unmarried individual. By effectively defining family narrowly as a married couple with children (or, in certain instances, adult dependents), the proposal would reinforce and show preference for a particular model of family, subsidizing its costs on the backs of others. Thus, a vague goal likely to have broad appeal—tax relief for middle-income families—may spur policies that reflect both compassion and bias.
Section 213 provides another example of how the Code, so often perceived as a body of law about nothing but revenue, economic policy, and the voraciousness of Uncle Sam, ultimately extends well beyond its assumed scope. This section provides a deduction for unreimbursed medical expenses. Only available to the extent medical expenses exceed 10% of an individual’s adjusted gross income (a term of art defined in §62), §213 is meant to relieve the potential financial strain of taxes when an individual incurs extraordinary medical costs. Thus, though the general rule is that personal costs are nondeductible, §213 departs from that general rule when, through no fault of her own—it seems reasonable to assume that an individual does not seek out medical costs—someone must allocate her income to care rather than taxes. Compassion and a concern for one’s ability to pay—expressions of a sense of fairness—once again emerge as drivers of the substance of the Code.
For years, elective birth control did not qualify as medical care while elective vasectomies did.
The definition of medical care is critical to interpreting §213 as it provides the means of sorting costs we are willing to subsidize—e.g., cancer treatments—and costs that we are not—elective plastic surgery, for example. Accordingly, the definition of medical care also reveals the biases of the time in which in applies and the individuals who interpret it. For years, elective birth control did not qualify as medical care while elective vasectomies did. Currently, there is a quiet debate centering upon whether fertility treatments provided to or for same sex couples satisfy the requirement of §213.
In a case now pending before the Eleventh Circuit Court of Appeals, a gay male couple utilized egg donation, in vitro fertilization, and surrogacy to have a child. The couple then attempted to deduct the costs as medical care and, following the Service’s denial of the deduction, brought a refund suit in the Middle District of Florida. The Code defines medical care as “amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body.” Though the IRS has permitted deductions for fertility costs to heterosexual couples, it has taken the position that such costs are not medical care when the individuals who incurred them are homosexual. The rationale for the deduction is not as brazenly discriminatory as denying the deduction because the taxpayer is gay. Instead, as evidenced in the Morrissey case, the rationale is less openly biased but still problematic. The Revenue Agent who initially denied the deduction justified his decision, in part, on the grounds that the couple did not have a “medical condition” but instead made a choice not to have children with someone of the opposite sex—i.e. their costs simply did not satisfy the statutory definition of medical care. Though the Appeals Officer denounced the Revenue Agent’s “outdated” view of sexuality and acknowledged that the couple is effectively infertile, she nevertheless denied the deduction, stating the current law did not permit a deduction under such circumstances. The Middle District agreed with the Service, granting the Service’s motion for summary judgment and therein upholding the denial of the deduction.
The outcome of the Morrissey case is yet to be decided, but in it, as in the discussion of who qualifies as family in the Code, we find an example of the ways in which tax law intersects with deeply personal and culturally contingent institutions. Just as criminal law reflects hundreds of years of compromise and change in notions of morality, justice, punishment, retribution, and deterrence, so too is tax law the result of over one hundred years of grappling with what we as individuals owe one another, our notions of fairness and belonging, and our tendencies toward opportunism and harmful bias. For many, the Trump Administration’s one-pager may appeal to an extent; tax relief, simplification, and assisting middle-class families seem to be laudable goals. The difficulty comes in cutting through the buzzwords in order to determine the substance of the proposal. In tax, the devil truly is in the details, and those details may be hard to decipher without technical knowledge. Yet if we are to have an open and honest debate over how to share the collective responsibilities of government, over the extent to which we want to care for each other as citizens and residents, getting into the weeds of tax reform is essential. And as the debate over tax reform moves forward, we, as citizens, should ensure that the laws we support elevate our best values.
Tessa Davis is an Assistant Professor of Law at the University of South Carolina specializing in taxation and tax policy. Professor Davis focuses her research on the ways in which tax law and policy are influenced by cultural context, particularly the impact on families. Her research interests include the influence of cultural context on the tax code, comparative taxation, and taxation in developing nations. Her current research explores the intersection of kinship theory and conceptions of family in the Internal Revenue Code. Her scholarship has appeared in the George Mason Law Review, the Denver Law Review, the Virginia Journal of Social Policy & the Law, the Florida State University Law Review, the Savannah Law Review, the Cardozo Journal of Law & Gender, and the Florida State University Journal of Transnational Law & Policy. In addition, she has been an invited speaker at Northwestern University Pritzker School of Law, University of Michigan Law School, Savannah Law School, and Davidson College.
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 President Trump’s tax one-pager is available at https://www.documentcloud.org/documents/3678871-Donald-Trump-s-tax-proposal.html#document/p1.
 Neil Buchanan, Saturation Coverage of Non-News About Tax Policy, April 2017, available at http://www.dorfonlaw.org/2017/04/saturation-coverage-of-non-news-about.html.
 Trump, supra note 3.
 For a wonderful analysis of then-candidate Trump’s tax plan, see Lily L. Batchelder., Families Facing Tax Increases Under Trump’s Tax Plan (October 28, 2016). Urban-Brookings Tax Policy Center Research Report, Oct. 28, 2016. Available at SSRN: https://ssrn.com/abstract=2842802. For an analysis of the recent tax announcement, see Chuck Marr, Commentary: New Trump Tax Plan Has Specific Costly Tax Cuts at the Top, Fuzzy Promises for Everyone Else, April 2017, available at http://www.cbpp.org/federal-tax/commentary-new-trump-tax-plan-has-specific-costly-tax-cuts-at-the-top-fuzzy-promises-for.
 26 USCA §267
 26 USCA §318
 U.S. v. Windsor 133 U.S. 2675 (2013), U.S. v. Windsor, 570 U.S. __ (2013); Rev. Rul. 2013-17 (2013)
 Batchelder, supra note 4. The proposal is no longer readily available. 26 USCA §§ 1-2.
 See generally Reproducing Value: How Tax Law Differentially Values Fertility, Sexuality & Marriage, 19 Cardozo J. of Law & Gender 1 (2012); Katherine Pratt, Deducting the Costs of Fertility Treatment: Implications of Magdalin v. Commissioner For Opposite-Sex Couples, Gay and Lesbian Same-Sex Couples, and Single Women and Men, 2009 Wis. L. Rev. 1283 (2009); Katherine T. Pratt, Inconceivable? Deducting the Costs of Fertility Treatment, 89 Cornell L. Rev. 1121, 1142-43 (2004).
 Morrissey v. United States, No. 8:15-CV-2736-T-26AEP, 2016 WL 8198717 (M.D. Fla. Dec. 22, 2016).
 26 U.S.C.A. § 213.
 Brief for the appellant, at 5, Morrisey v. U.S., No. 17-10685 (11th Cir. 2017).
 Brief for the appellant at 5-6, Morrisey v. U.S., No. 17-10685 (11th Cir. 2017).
 Morrissey v. United States, No. 8:15-CV-2736-T-26AEP, 2016 WL 8198717 (M.D. Fla. Dec. 22, 2016). 26 U.S.C.A. § 213 (West).