Wealthy taxpayers have always attempted to reduce their federal income taxes. Before 1948, when the United States had an individual-based system, one popular method was to shift income between spouses so that more of a husband's income could be reported by and taxed to his lower-income, and thus lower-tax-bracket, wife. Congress eliminated the reward for this tax-avoidance behavior in 1948 by nationalizing income splitting via the joint return. Today, there are proposals to return to an individual-based system. Evaluating the proposal for individual filing, this Article first explores the development of the income-splitting joint return as a historical guide to the potential costs of this proposal. The Article then rejects the prospect that today's Internal Revenue Service (IRS) will be able to rein in a resurgence of this type of tax avoidance. Finally, in addition to these practical concerns, this Article contends that calculations on a unitary basis remain today, as in the past, more accurate and more just for judging a married couple's ability to pay taxes when compared to other taxpayers. As a result of these considerations, the joint return is the more equitable method of marital tax filing.
Stephanie Hunter McMahon, To Have and to Hold: What Does Love (of Money) Have to Do with Joint Tax Filing, 11 Nev. L. J. 718 (2011)