Abstract
This Article offers a new descriptive account of the role of marriage in the federal tax system. It first outlines an economic frame that explains both why marriage is economically valuable—marriage produces large amounts of untaxed surplus—and why its legal structure is as it is—drawing on both Coase and the theory of numerus clausus. The Article then suggests that most federal tax rules that turn on marriage can be understood as solutions to one of two interrelated problems: “entanglement” and “relative indifference.” By “entanglement,” I refer to the fact that the daily activities of spouses are commonly so intertwined as to make standard rules for their taxation impossible to apply, even if we wanted to. By “relative indifference,” I refer to the fact that entangled spouses often do not care who owns what, owes what, earns what or pays what to the degree they would if they were not interpersonally committed. As a result, they are often able to engage in tax avoidance behaviors that atomistically motivated actors would find unattractive.
Recommended Citation
Seto, Theodore P.
(2023)
"The Role of Marriage in the Internal Revenue Code,"
Florida Tax Review: Vol. 27:
No.
1, Article 8.
Available at:
https://scholarship.law.ufl.edu/ftr/vol27/iss1/8