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Tax
April 1997
Tax Laws Gyp Working Mothers	Some working wives and mothers are turning in resignations to their employers as they learn that their professional labors are earning them next to nothing after taxes are deducted. Tax specialists say that the average two-earner family sees two-thirds of the wife's typical lower salary lost to taxes and work-related expenses. Since married couples usually fill out one tax form and pay taxes under one rate schedule, the wife's first dollar of earnings is taxed at the husband's top marginal rate. Thus, the wife is in at least the 31 percent tax bracket -- with Social Security taxes of 7.65 percent added. When state and local taxes are included, the wife's total tax burden can reach as high as 50 percent in many areas of the country. Then there are the non-tax costs of holding down a job: child-care expenses, commuting, dry cleaning, clothing, housekeeping, restaurant meals, and time-saving but more expensive in-home food. All these additional non-tax costs might add up to $20,000 a year -- offset only by a $1,000 or less child-care tax credit. Analysts who have run the figures estimate that a wife and mother making $40,000 a year could very well wind up realizing only $1,000 in real earnings. Source: Edward J. McCaffery (University of Southern California), "Tax Laws No Friend of Working Mothers," USA Today, April 7, 1997.