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I. Introduction: The Policy Rationale for a Child Support DeductionBobby Brown, the once famous R&B singer, is the new symbol of the deadbeat dad, having been arrested several times for failing to pay child support.[1] Could the tax system be used to help fathers like Brown meet their obligations? Would this be a wise redistribution of public assets? Would this be helpful to children? This Article addresses these questions.
Children are our future, literally. We profess this sentiment in our songs,[2] evidencing, among other things, its universality in our collective consciousness. “The duty of parents to provide shelter and sustenance to their dependents . . . [is one of the] most fundamental and necessitous known to society, both animal and human.”[3] The evidence suggests that we are falling short on our obligations to children. While the United States spends $8 billion per month fighting which many deem an unpopular war in Iraq,[4] tardy child support payments also tally in the billions.[5] Failure to pay child support, called the largest single crime in America,[6] and noted as one of the most pervasive acts of civil disobedience since prohibition and the anti-drug laws, persists.[7] An estimated 75% to 87% of children in single parent households receive no financial support from their non-custodial parent.[8] The scope of the problem is elucidated by the shocking fact that half of our nation’s children, at some point in the next decade, will be eligible to receive child support.[9]
The United States is facing a real crisis regarding child support. To borrow an analogy from U.S. Sen. Barack Obama, although this may be a “quiet” crisis,[10] it is nevertheless real and painful to millions of women, children, and men. Public action started in earnest in the 1980s when the federal government began to crack down on parents who do not make their mandated payments.[11] Congress encouraged similar crackdowns at the state level by threatening to reduce federal subsidies.[12] This effort has extended to all segments of the population, including some celebrities.[13] In one high profile case, the irresponsible father went so far as to murder someone in order to shirk his fatherly duties.[14]
This Article does not eschew the term “deadbeat dad” in favor of more politically correct nomenclature (e.g., “deadbeat parent”), because the evidence still shows that the non-custodial parent of children indebted with child support payments remains, in large part, the father of the child.[15] Yet, there exists another side to the story. The reality of the deadbeat dad might not be that repulsive. He has been described in more human terms as a man trying to make the best of a bad situation,[16] as contemporary literature begins to debunk the myth of the deadbeat dad.[17] Some have argued that the current legal system of child support enforcement is responsible for creating the deadbeat dad.[18] The unique American family law system at the state level often bifurcates the rights and responsibilities of parents.[19] The custodial parent is assigned the right of custody but often bears none of the financial responsibility to support the children, as that responsibility is assigned to the non-custodial parent who is denied the right to participate in the lives of the children.[20] Some experts in the field have advanced the above reasoning as the cause for this large scale civil disobedience.[21]
Clearly, some fathers deserve the “deadbeat dad” moniker. One popular image is, for instance, those fathers who drive luxury cars while their children starve.[22] This, however, is not the norm. The average father is responsible and wants to do the right thing, but there are strong forces against him, like the inability to pay.[23] Survey after survey shows that custodial mothers report that the reason for lack of payment from the non-custodial father is that “he can’t pay.”[24] Nevertheless, the authorities blindly continue to enforce child support payment debts and, in some cases, enforce them by imprisonment;[25] in situations where the mother receives public aid, federal and state governments will provide the child support payment to the mother and hold the father indebted to the government for that amount.[26] In cases where the mother is not dependent on welfare, the government has largely stayed out of the fray.[27]
To deal with its new role as creditor, the federal government created the Office of Child Support Enforcement (“OCSE”) to enforce child support payments. By its own estimation, the OCSE has been wildly successful.[28] Independent critics, however, demur, accusing the office of cooking its books.[29] These claims will be analyzed later. Clearly, though, the child support crisis remains a major sociological problem and is intensifying as the number of single-parent households rises. This Article proposes a solution—provide a positive financial incentive to the non-custodial parent to make payments.
Psychologists tell us that to ensure success in modifying behavior, a “carrot and stick approach” is needed.[30] In the child support arena, the government has used the “stick” approach for the past three decades, with arguably little success.[31] It might be time to adopt a carrot approach. The stick must be retained to address those who will only respond to the coercive power of the state. For the vast majority, positive incentives can be created to push them into the correct behavior.
One of the easiest and least costly ways of ensuring greater discharge of child support obligations is to permit a tax deduction for the payor. Coupled with an inclusion in the income of the payee parent, the government would lose little tax revenue because: (1) the number of women earning compensate wages to their male counterparts is rising, thus, decreasing the tax distortion of a deduction/inclusion regime; and (2) the number of men gaining custody of their children is also rising. Moreover, tax revenue might increase, on balance, through a reduction in administrative costs.[32]
More importantly, because it has been recognized that there is a direct correlation between payment of child support and participation in a child’s life,[33] such an incentive has the added benefit of keeping or reintroducing the father in the lives of his children. This would have important sociological consequences, especially in the Latino and African-American communities where participation of fathers in the lives of their children has been reported to be much lower than that of other communities.[34]
Both tax and non-tax commentators have proposed variations on the child support deduction theme.[35] Revenue-oriented schemes normally concern the technicalities of the tax system, such as whether the Internal Revenue Code (“IRC”) would permit this type of deduction—it is a “personal deduction”—or whether the payee parent can receive a deduction for non-payment of child support.[36] Non-tax commentators, on the other hand, mostly analyze the sociological aspect of this debate and address the economic and tax aspects of the debate only in passing. This proposal bridges the gap by marrying the sociological aspects of child support debate with the technicalities of the tax laws. Additionally, this Article will argue the theoretical rationale justifying such a deduction on policy grounds,[37] and will employ the traditional process of evaluating good tax laws: whether it is equitable, efficient and simple, essentially addressing whether the proposal is good tax law.[38]
Part II outlines the history of the problem of non-payment of child support and the evolution of remedial measures. Part III proposes a series of related solutions to the problem, namely setting realistic child support payments in conjunction with permitting a deduction for such payments. Part IV discusses tax deductions in the context of the typical deadbeat dad dilemma, focusing on government expenditure, tax arbitrage,[39] and the societal pressures of non-payment.
II. The Problems of Child SupportA. History of Child Support in the United StatesToday, fathers make most child support payments because mothers usually have custody of children.[40] However, this trend is rapidly changing, as more judges are granting joint[41] and sole custody to fathers.[42] To most people, granting custody automatically to the mother seems natural because she is perceived as the more nurturing parent and hence, most able to raise children.[43] This has not always been the case. In early America, the children stayed with their father if parents divorced.[44] Some attribute this to the prevalent culture at the time, which by definition is a set of internalized values.[45] Thus, attributing some sociological event to culture begs the question. The answer lies in the economics of the time. Prior to the industrial revolution, the economy of the United States was primarily agrarian. As titular head of the family, the father needed as much help as he could get on the farm. As a result, society in the eighteenth and mid-nineteenth centuries emphasized “the father’s centrality in raising the children and preparing them for the adult world.”[46] As the industrial revolution progressed, fathers tended to work outside the homestead.[47] Henceforth, the image of the father settled into that of the “external wage-earner,” with the mother as “home-bound nurturer,”[48] giving rise to the “cult of motherhood” and the “tender years doctrine” of the early twentieth century.[49]
During these times, child support payment orders were rare, owing to the fact that parents were only charged with providing a home for their children.[50] Further, the divorce rate was extremely low due to both the economically devastating costs of divorce and enormous social pressure against the dissolution of marriage.[51] As we will see later, there were also legal impediments to granting child support.[52] In the case of death of one or both parents, close relatives provided support to the children.[53]
In the early twentieth century, there was a “reorientation of welfare policy toward children,”[54] which entailed a shift “premised on the belief that the mother-child relationship was fundamental and sacred and that home life should be encouraged and strengthened.”[55] Evidence also suggests that a precursor to our current welfare system was the attempt in the late nineteenth and early twentieth centuries to assist “poor children in their own homes.”[56] Some states made early efforts to criminalize the non-payment of child support.[57] In most states, however, these new criminal laws were only enforced in cases where destitute children were victimized.[58] More comprehensive enforcement of the child support laws was still a few decades away.
1. Federal Government InvolvementThe record of federal government’s involvement in supporting children extends back to the end of the Civil War. It established the Freedman’s Bureau to support the newly freed blacks and created black schools, particularly in the South.[59] The federal government also provided pensions for “disabled Union soldiers or their widows and dependent children.”[60]
Although the federal government spent large sums on these and other efforts, it did not begin to gain a more central role in welfare and child support until after the Depression with the passage of the Social Security Act and Aid to Dependent Children Act.[61] By the 1960s, the federal government assumed the central role. The father, in theory, remained the party responsible for the well-being of his children, but few enforcement efforts were made against him. The last twenty years witnessed an explosion in child support enforcement spurred on, in part, by the bi-partisan Family Support Act of 1988.[62] The Act reflected changes in society’s views about child support and greater emphasis on the responsibility of fathers. The greater share of responsibility was advocated as far back as 1949 when former president Gerald Ford introduced a bill (H.R. 4580) on that score as a congressman.[63]
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