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54 Wake Forest L. Rev. 661 (2019)
Beyond the Marriage Tax Trilemma

handle is hein.journals/wflr54 and id is 685 raw text is: BEYOND THE MARRIAGE TAX TRILEMMA Daniel Hemel* For decades, the well-known marriage tax trilemma has played a central role in discussions of the tax treatment of the family unit. The trilemma refers to the mathematical impossibility of constructing a tax system that imposes the same tax liability across all married couples with the same income (couples neutrality), neither encourages nor penalizes marriage (marriage neutrality), and taxes higher income individuals at higher rates (progressivity). Numerous articles have proposed responses to the trilemma that choose two of the legs over a third or that seek to split the difference among the competing neutrality norms that the trilemma casts as desirable. Most casebooks, meanwhile, use the trilemma to introduce students to the policy debate over the taxation of marriage and the household. The overwhelming emphasis on the trilemma is surprising once one recognizes that there is in fact no trilemma at all: we need not choose among couples neutrality, marriage neutrality, and progressivity because we can have all three. The solution-which several scholars have noted, but the tax policy debate has largely ignored-lies in a flat tax rate combined with a refundable per-person tax credit (or demogrant'), which could be constructed so as to yield a highly progressive average rate structure while maintaining couples neutrality and marriage neutrality. Whatever the merits of the flat tax plus demogrant as a policy matter, it plays a useful role as a thought experiment: If we achieved progressivity through a flat tax and a demogrant, such that we could have couples neutrality and marriage neutrality simultaneously, would we want to deviate from these neutrality norms anyway? If so-if we would want to violate the couples neutrality and marriage neutrality norms even if * Assistant Professor of Law and Ronald H. Coase Research Scholar, University of Chicago Law School; Visiting Professor, Harvard Law School. For helpful comments, the author thanks Ellen Aprill, Joseph Bankman, Thomas Brennan, Thomas Cain, Charlotte Crane, Dhammika Dharmapala, Sarah Lawsky, Katie Pratt, Ted Seto, David Weisbach, the editors of the Wake Forest Law Review, and participants at workshops at Loyola (Los Angeles) Law School, Northwestern Pritzker School of Law, and the University of Chicago Law School.

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