Subject: Head of Household filing status for Child Support payers Comment: Head of Household filing status for Child Support payers Summary: I recommend that any taxpayer who pays child support and is fully current on payments be allowed to elect Head of Household filing status. Discussion: None of the income tax proposals, with the partial exception of Martin Feldstein's proposal (at http://www.taxreformpanel.gov/meetings/docs/7) to tax husbands and wives separately, addresses the frequent unfairness of today's filing status categories. Filing status is used as a proxy for ability to pay. For example, married couples are presumed to have higher expenses, so they pay less than a single taxpayer with the same income. The problem is that filing status is a highly inaccurate measure of ability to pay. Single taxpayers often have other people to support. Divorced fathers are often counted as single even if they are paying child support amounts that can equal or exceed the expenses a married couple would have. Conversely, a non-working spouse is considered an expense even if he or she actually generates a net savings for the couple by eliminating expenditures on child care or household maintenance. I recommend that any taxpayer who pays child support and is fully current on payments be allowed to elect Head of Household filing status. For the record, I would not be affected by this change. It just seems like a reasonable step toward fairness, and it encourages people who owe child support to due the right thing. At the same time, it does not open the whole can of worms about marriage penalties vs. marriage bonuses. If you decide to recommend eliminating joint returns, based perhaps on Martin Feldstein's observation that most other countries tax people as individuals rather than as family units, please consider providing HoH filing status or a similar incentive for taxpayers who pay child support and are current. Keith Jarett, individual Systems Engineer Lafayette, CA 94549 Fax: (925) 256-1024 email: kjarett 'at' hotmail.com |