Originally published here.

Social attitudes towards childcare responsibilities have come a long way in recent decades. However, entrenched views on gender roles often mean that the maternal care of children is still seen as optimal. When women with children need or choose to work outside the home, either as an employee or in carrying on a  business,  inevitably  the vexed issue of childcare  expenses comes up. Most women consider whether there are subsidies or concessions available to at least partially offset the costs of such expenses, accepting the fact that the tax system does not allow for a tax deduction against any income earned from outside work.

In this essay, we challenge taxpayers, especially those who bear the cost of childcare  (mainly women), to reconsider  whether those expenses  should be a tax deduction or whether it is appropriate to accept a system that offers what  are  generally considered,  and  labelled,  concessions and/or  subsidies. The objective  of  this  essay  is to  revisit  the  arguments  surrounding the tax recognition of such expenses and to make two basic points: First, using the jurisdictions  of  the  United  States,  the  United  Kingdom,  Australia,  and Canada, we argue that the reasoning in the cases is flawed and gender-biased. Second, we argue that the tax theory  relating  to  childcare  costs  is  opaque, enforces stereotypical constructs of working women, and has not kept pace with the changing nature of the economy.

In considering the issue of tax recognition of childcare costs, it is useful to consider three basic propositions: 1.  Women  are  less  likely  to  be  in  the  paid  workforce  than  male counterparts (although the statistics have improved over the past 50 years); 2.  Women earn less than their male counterparts; and 3.  Society  expects  women  to  bear  the  primary  responsibility  for childcare.30 It  could  therefore be  argued  that  women  deserve  to  have the  true  cost  of childcare recognized by the tax system. The cost of such a measure would of course  be  significant,  but  that  should  not  preclude  a  reassessment  of  the current position which fails to accept the role and significance of women in the workforce and the constraints imposed on them by societal expectations.

In Australia, it has been nearly fifty years since a single judge held that the cost  of childcare was not deductible  to a single mother  even though he found that she could not have worked without incurring childcare expenses. In 1972, only 39.5% of Australian women between the ages of twenty-five and  sixty-four  were  in  the  workforce,  compared  to  60.5%  of  Australian women participating in the workforce in January 2018,31 but this still remains lower than the  male  participation  rate. In 2017, the Australian government launched  a  strategy  to  meet  Australia’s  G20  commitment  to  reduce  the gender participation gap by 25% by 2025.32 Although the strategy refers to the importance of  childcare  and  the  impact  of tax on  decisions  by  women about whether to work, the strategy does not address the possibility that such costs be treated as  deductible. We suggest it is time that  such a proposition was given serious consideration.

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