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Legal History

2011

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To Have And To Hold: What Does Love (Of Money) Have To Do With Joint Tax Filing, Stephanie Mcmahon Jan 2011

To Have And To Hold: What Does Love (Of Money) Have To Do With Joint Tax Filing, Stephanie Mcmahon

Faculty Articles and Other Publications

Wealthy taxpayers have always attempted to reduce their federal income taxes. Before 1948, when the United States had an individual-based system, one popular method was to shift income between spouses so that more of a husband's income could be reported by and taxed to his lower-income, and thus lower-tax-bracket, wife. Congress eliminated the reward for this tax-avoidance behavior in 1948 by nationalizing income splitting via the joint return. Today, there are proposals to return to an individual-based system. Evaluating the proposal for individual filing, this Article first explores the development of the income-splitting joint return as a historical guide to …