Rachael Lorna Johnstone
Rachael Lorna Johnstone is a lecturer in law at the University of Akureyri where she has taught and conducted research since 2003. She obtained her doctorate in 2004 from the University of Toronto, Canada, entitled Working for Women, in which she focused on gender inequality in the British labour market from a human rights perspective. She has an LL.M. from the European Academy of Legal Theory, Brussels and an LL.B. (Hons) from the University of Glasgow. Her main research interests are international law, human rights law, and gender and the law. The author would like to thank the following people for their comments on an earlier draft of this paper: Símon Þór Jónsson (KPMG) and Sólveig Hrafnsdóttir, Giorgio Baruchello and Aðalheiður Ámundadóttir (all University of Akureyri). All errors are the sole responsibility of the author. She would also like to congratulate the editors of Lögfræðingur on this special edition.
Grein birt í: Lögfræðingur 2009
Tax is a Feminist Issue
1. Introduction
The financial crisis facing Iceland in 2009 and beyond makes it likely that the tax and spending systems of this traditional Nordic welfare state will be the object of considerable scrutiny and reform, not least if the new administration installed in February successfully holds onto power following April elections. As part of the general review process, this author proposes that tax law and policy be examined with gender equality as one of the principal frames of reference. To this author’s knowledge, there has never been a comprehensive audit of the entire tax system in Iceland from a gender perspective. This would be an auspicious time for the undertaking of such an audit.
In the next section, the author will introduce some basic principles of taxation to demonstrate key ways in which tax law reflects political values. The concept of gender budgeting is then explained in part 3. In the main part of this paper, part 4, the author will explore two features of income tax regulations in Iceland that appear to have unequal impact on women and men. Some brief comments are made in part 5 about the importance of maintaining a gender perspective through the financial crisis and in light of this, the author concludes in part 6 that a gender budget group is needed in Iceland.
2. Principles of Taxation 3. Gender Budgeting
It may surprise some to hear that there can be a feminist perspective on tax law: can anything as mundane as taxation be sexist? The rules are the same for everyone. However, despite their superficial equality, tax systems are not neutral. The Icelandic tax code is a child of Parliament and a creature of law; as such it is fundamentally political, reflecting the political convictions of those who promulgated it.
Marjorie Kornhauser, writing on the United States’ system, explains:
Although the income tax laws are written in gender neutral language, they have, generally, been written by and for men. Consequently, legislators have, for the most part, considered and enacted tax legislation based on a narrow perspective that concentrates on individualism, economic growth, and the necessary risky behaviour needed to achieve both.1
Any system of taxation and spending creates direct and indirect incen- tives for individuals to follow particular courses of behaviour and these vary according to personal and family characteristics. Tax and spending decisions have disparate impact on different groups, for example: those with higher and lower incomes; those with and without dependent children; and men and women.
There are three main principles of fairness in taxation: horizontal equality, vertical equality, and neutrality. Neutrality is the requirement that tax sys- tems interfere with market transactions as little as possible.2 Any decision to tax has direct implications for individuals’ decisions, for example, whether, when and where to work for pay; and whether to spend or to save. The principle of neutrality in taxation suggests that the tax laws should have as little impact as possible on these desicions. The principle of neutrality assumes that the market needs no “correction” through tax measures. However, in practice, governments, including the Icelandic government, make quite strong corrective measures, such as using high taxes to attempt to dissuade consumption of alcohol and cigarettes and maintaining a comparatively low tax rate on unearned income to encourage investment.
Horizontal equality demands that people in like circumstances be treated alike.3 Since societies are made up of a range of individuals and it is rare to find two individuals in exactly the same circumstances, it can never suffice alone. Horizontal equality is thus complimented by the principle of vertical equity: treating people in different circumstances appropriately in accordance with those differences.4 It is the principle of vertical equality that most commonly betrays the social and political values at the heart of the system.
The first quandary is that of the tax unit: does the state tax the family or the individual? What allowances should be made for family responsibilities? Then is the choice of the tax base: to tax income (an income tax) or con- sumption (e.g. sales tax, such as the Icelandic VSK); to tax wealth and savings or not? Once a decision has been made to tax income, as is common in all Western democracies, one must decide whether to tax different sources of income at different levels, for example, whether or not to have a different tax rates for employment income and income from other sources. Questions about progressivity raise their heads: should the system be progressive, i.e. taxing those on higher incomes at higher percentages? Should it be flat, with the same percentage tax applicable to everybody, regardless of income? Or should it be regressive, e.g. a “head tax” where everybody pays the same nominal sum with the result that those on higher incomes pay a lower percentage of their incomes in tax? These are by no means the only political questions that underlie a tax system but it should be obvious that their answers are far from neutral.
The distinction between marginal and average tax rates is worthy of clarification at this point. The average tax rate describes the percentage of income paid in tax and this is the key to assessing progressivity or regressivity. A scheme in which someone earning 100m ISK paid 10m ISK in tax, and someone earning 10m ISK paid only 1m ISK in tax would not be progressive, as both are paying the same percentage (10%) of their incomes in tax even though the former is obviously paying a higher total amount. To be progressive, the former taxpayer would have to pay at least 10.000.001 ISK in tax, compared to the 1m ISK of the second. The marginal tax rate, by contrast, describes the percentage of the next or last krona of income that is submitted in tax. Marginal tax rates are used when behavioural decisions are being made, in particular whether to work for pay or not or whether to increase or reduce working hours. In Iceland, this is either 0% (until the personal discount is exhausted) or 35,72% (on further earnings) on earned income for 2008.
3. Gender Budgeting
A “gender budget” is not a budget that is intended to promote women at the expense of men, nor does it focus on policies specifically targeted at women, such as single parents’ employment incentives. Instead, a gender budget is a review of the entire tax system to analyse the extent to which superficially neutral rules can have unintended unequal impact on the decisions of men and women. The United Kingdom’s gender budget group explains it thus:
Gender budget initiatives go beyond the assessment of programmes tar- geted specifically at women and girls and seek to expose assumptions of ‘gender neutrality’ within all economic policy - raising awareness and understanding that budgets will impact differently on women and men because of the different social and economic positioning.5
It is not suggested that Iceland’s financial framework has been deliberately designed to maintain the financial inequality between men and women but it has been designed by men. Even in this modern, Nordic state which prides itself on its powerful women and which had a well-loved female president for 16 years, women and men have not equally wielded political and economic power.6 Of the cabinet which precipitated the economic collapse in October 2008, women held only four of twelve ministries and three of these were rela- tively minor portfolios. There had never been a female prime minister or min- ister of finance. Following the collapse of that administration, in February 2009, Jóhanna Sigurðardóttir became Iceland’s first female prime minister and she led a cabinet that was for the first time numerically balanced between women and men. However, this is a temporary administration which will hold office for less than three months before elections determine whether Sigurðardóttir retains her position and whether a genderbalanced government is to be more than a transient, symbolic gesture.
At the time of writing, inside the ministry of finance, eight of the nine most senior positions were held by men.7 The three governors of the Icelandic central bank were men and both its principal officers and the Parliamentary supervisory board were overwhelmingly male (although personnel changes appeared imminent following the change in government).8 The gender pay gap, despite equality legislation, still persists at 14% per hour in the private sector for fulltime employees. The total earnings gap is even higher (40,7%) as men continue to be available to work longer hours on average than women and receive more irregular payments such as bonuses.9 Iceland’s tax system exacerbates this inequality.
4. Two Examples in the Icelandic Tax Code
Two examples will be examined for their potentially disparate impact on men and women in Iceland. These are the transferability of the personal discount (persónuafsláttur) and the differential tax rates for earned and unearned income (tekjuskattur and fjármagnstekjuskattur, respectively). The intention of this paper is to provide the first word rather than the last word on the topic; prima facie conclusions are tentatively suggested but extensive further analysis is required of the entire system before final determinations can be made.
A. The Transferability of the Personal Discount within Couples
The transferability of the personal discount (persónuafsláttur) between domestic partners has significant gender implications because it has a substantial impact on marginal tax rates and hence employment decisions of secondary earners. Although individual taxation exists formally, the full transferability of the personal discount, combined with the flat rate sched- ule on earned income means that in effect, the tax unit is the couple, not the individual.10
Individuals and couples are not in a static state of employment, unemployment or economic inactivity.11 Instead, throughout a lifetime, people make decisions whether to enter or leave employment, e.g. to become students, to retire, to leave paid work to look after family members or re-enter employment after a period of absence. Someone currently economically inactive who is considering entering or re-entering paid employment will look at the financial returns of doing so. At this point the tax burden associated with earning an income will be a significant factor, in particular, the marginal tax rate.
The impact on marginal and average tax rates for secondary earners (2008)
The personal discount in 2008 was 404.409 per annum or 34.034 per month. This is a discount against tax payable, not a deduction against gross taxable income. The equivalent deductions against taxable income are 1.143.362 ISK per annum or 95.280 ISK per month, i.e. a single person in 2008 could earn 1.143.362 ISK per annum or 95.280 ISK per month before incurring any tax liability.12
The single person who is inactive (e.g. a school-leaver, a student, single- parent) and decides to enter the workplace will face a marginal monthly tax rate of 0 on the first 95.280; i.e. he or she will keep all of that income free of tax.13 Earned income beyond that amount is taxed at the marginal rate of 35,72% (tekjuskattur). (See table 1).
In a couple, where only one partner has an income, that person (primary earner in a couple) can enjoy a double personal discount because he or she can apply the partner’s (unused) personal discount against his or her tax liabilities, with the results that he or she can take home 2.286.724 ISK per annum free of tax or 190.560 ISK per month. Earnings above that amount would face the (marginal) tax rate of 35,72%.
However, should the non-earning partner (secondary earner) contem- plate entering the paid workforce, he or she will face a tax rate of 35,72% on the very first krona earned; the personal discount is already fully applied against the primary earner’s income. This is demonstrated in table 1.
Table 1 – Income tax bands (2008) for single person, primary earner in couple and secondary earner (monthly earnings)
|
Earner |
Tax free earnings (ISK) |
Earnings taxed at 35,72% (ISK) |
|
Single person |
0 - 95.280 |
95.281 – ∞ |
|
Primary earner in couple |
0 - 190.560 |
190.561 - ∞ |
|
Secondary earner |
0 |
1 - ∞ |
The gender issue arises because it is consistently more common for women to have periods of economic inactivity than men. Average activity rates in 2007 were 87,5% for men, but only 78,6% for women within the working age population, meaning that over 21% of women were considered “inactive” at any one time, compared to only 12,5% of men.14 Within hetero- sexual relationships, the result is that men are nearly twice as likely as women to be a sole earner within a couple and thus benefit from a double personal discount; women are twice as likely to be non-earning partners and face a marginal tax rate on entering employment of 35,72%
The effective average tax rates are also worthy of note and can be seen in table 2.
Table 2 – Income tax liability (2008) on earned income for single person, primary earner and secondary earners at selected income levels
|
Earner |
Income ISK |
Tax at 35,72% ISK |
Personal Disc. ISK |
Tax Payable ISK |
Average Tax Rate |
|
Average monthly full-time regular salary (2007) 15 |
|||||
|
Single person |
330.000 |
117.876 |
34.034 |
83.842 |
25,41% |
|
Primary earn- er in couple |
330.000 |
117.876 |
68.068 |
49.808 |
15,09% |
|
Secondary earner |
330.000 |
117.876 |
0 |
117.876 |
35,72% |
|
Minimum monthly full-time regular salary (unskilled, 2008)16 |
|||||
|
Single person |
137.752 |
49.205 |
34.034 |
15.171 |
11,01% |
|
Primary earn- er in couple |
137.752 |
49.205 |
49.20517 |
0 |
0% |
|
Earner |
Income ISK |
Tax at 35,72% ISK |
Personal Disc. ISK |
Tax Payable ISK |
Average Tax Rate |
|
Secondary earner |
137.752 |
49.205 |
18.863 |
30.342 |
22,03% |
|
Couple on average monthly male full-time earnings and average monthly female full-time regular salary respectively (2007)18 |
|||||
|
Primary earn- er in couple |
353.000 |
126.092 |
68.068 |
58.024 |
16,44% |
|
Secondary earner |
281.000 |
100.373 |
0 |
100.373 |
35,72% |
|
Couple on average monthly full-time male earnings and average monthly female part-time regular salary respectively (2007)19 |
|||||
|
Primary earn- er in couple |
353.000 |
126.092 |
68.068 |
58.024 |
16,44% |
|
Secondary earner |
211.000 |
75.369 |
0 |
75.369 |
35,72% |
Changes for 2009 exacerbate the inequality
In 2009, the tax rate on earned income will rise to 37,2% and the personal discount is raised to 42.205 per person to compensate the lower paid.20
However, these changes will exacerbate the disincentive for secondary earnings and increase the reward for sole earners in couples. Secondary earners now face a tax rate of 37,2% on every krona earned. Sole earners in couples can now benefit from a combined personal discount of 84.410, meaning that they pay no income tax on the first 226.909 ISK per month. This is illustrated in table 3.
Table 3 – Income tax bands for single person, primary earner in couple and secondary earner 2009 (monthly earnings)
|
Earner |
Tax free earnings (ISK) |
Earnings taxed at 37,2% (ISK) |
|
Single person |
0 – 113.454 |
113.455 – ∞ |
|
Primary earner in couple |
0 – 226.909 |
226.910 - ∞ |
|
Secondary earner |
0 |
1 - ∞ |
On average full-time regular salary, the effect is as shown in table 4.
Table 4 – Income tax liability (2009) on earned income for single person, primary earner and secondary earners on average full-time regular salary (2007) (monthly)
|
Earner |
Income ISK |
Tax at 37,2% ISK |
Personal Discount ISK |
Tax Payable ISK |
Average Tax Rate |
|
Single person |
330.000 |
122.760 |
42.205 |
80.555 |
24,41% |
|
Primary earner in couple |
330.000 |
122.760 |
84.410 |
38.350 |
11,62% |
|
Secondary earner |
330.000 |
122.760 |
0 |
122.760 |
37,20% |
Justifications and explanations
It is certainly possible that on deciding to enter the workplace, the secondary earner will demand that she apply her own personal discount against her own earnings; but the couple’s total income and tax liability will remain unchanged. Given the known costs associated with entering work, such as travel, work attire, and most conspicuously, child-care, without the benefit of a personal discount to compensate for these, the secondary earner may discover that the family is little better off by her participation in paid work. Indeed, it makes more financial sense for the sole earner to increase his (or her) hours rather than encourage the secondary earner to enter paid employment: no further child-care or work-related expenses need be incurred, and the sole earner is also likely to receive an overtime premium. This has knock-on implications for parents’ ability to be fully and equally involved with their children.
The transferability of the personal discount between couples was not intended to discourage economically inactive partners from returning to paid employment even if that is its unintended consequence. Instead, there are a number of justifications, some ancient, some modern, for its exis- tence. However, none of these are convincing in modern times when women and men are considered equally responsible for their own financial welfare and that of their children.
Traditionally, when the tax system viewed the family as the basic unit for taxation, it was thought that the more adults in the family, the lesser the family’s ability to pay. The assumption was that on marriage, a man took on a wife whom he had to support and thus his tax liability should be reduced to take account of his lesser ability to pay. In contemporary times, there can be little support for such an infantilising interpretation of women’s role within marriage. Instead, women are considered equally responsible for providing for their families, whether they do so by means of their market- place employment, their unpaid labour within the home, or, most commonly in Iceland, both. Imputed income (benefits derived from unpaid labour) are real and a man with a home-maker spouse is not economically worse off than a single man. The single man may need to purchase services in the market-place that the primary earner obtains for free, such as cleaning, cooking, laundry and care of his children or elderly dependents, and these are not deductible from his taxable earnings.
The transferability of the personal discount continues to rely on the couple as the unit of taxation. A sole earner couple earning 500.000 ISK per month pays the same tax as a couple where each partner earns 250.000 ISK per month; they are thus treated equally. However, these couples are not horizontally equal; the former couple can benefit from much more imputed income and the latter couple will incur more work-related expenses.
One ex post facto justification for the transferability of the discount is that it actually recognises this unpaid labour; the personal discount can be considered compensation for the work actually done by the stay at home partner. However, this is unconvincing, as it is not paid to the stay at home partner, but to the earner. The sole earner thus benefits twice; first from the unpaid labour of the spouse and secondly from the tax deduction. There can be no assumption that the stay at home partner has access to the earner’s income. Instead, evidence to the contrary exists: the lower the personal in- come of the female in the couple, the less control she has.21 Even if couples share with regard to consumption (and it would be hard not to pool heating, electricity and housing costs), real sharing of decision making power is much less in evidence. Empirical studies in both the United States and in the United Kingdom strongly indicate that in most couples, s/he who earns the money decides how it is spent. If the earner prefers a larger house and fewer holidays, that is what the couple enjoy. The “enjoyment” is shared, yet the power to choose what is enjoyed remains firmly in the hands of s/he whose name is on the wage slip.22
Another possibility is that the transferability of the personal discount supports stay at home parents; parents who decide that they would like to look after their young children full-time in preference to sending them to kindergarten. On closer inspection, this justification is likewise far from satisfactory as the transferability of the personal discount does not depend on the presence or otherwise of children within the family and does nothing to help single parents to whom the option is not available. There should be no confusion with direct payments to stay at home mothers and fathers in lieu of payments to child-minders or kindergartens (þjónustutrygging).
Given the likelihood of scarcity of work in Iceland in 2009, the prevalence of single earner couples may increase but to the extent that one partner is unemployed (involuntary) as opposed to inactive (voluntary), they will not be helped by the ability to transfer the personal discount. Unemployment benefits are also taxable and therefore the unemployed will seek to apply their own personal discount against their unemployment receipts.
Finally, as evident from table 2 above, the transferability of the personal discount fails to support poorer sole earner couples. At minimum wage levels, income is too low for the double personal discount to be of full benefit.
This is a complicated social and economic problem and further research is needed on the impact of the transferable personal discount on employment incentives and disincentives. This author would welcome studies into, inter alia, the likely impact of abolishing the transferability of personal discounts altogether, the effects of paying personal discounts directly to non-earners as a kind of negative income tax, and the effects of replacing the transferability of personal discounts based on marital and cohabitation status to increasing personal discounts for parents or increasing child allowances directly.
B. Differential Tax Rates on Earned and Unearned Income
To lure investment into Iceland, the government exploits a policy of “com- parative advantage” by means of which they attempt to make investing in Iceland both easier (by virtue of light regulation) and cheaper (by virtue of low taxation). Nothing more need be said today about the disastrous results of the light regulation but the lower taxation of unearned income in Iceland takes on a sinister light through a gender-budgeting lens.
Tax liability on earned and unearned income (2008)
As seen above, the taxation percentage of earned income (employment in- come) in 2008 is 35,72% (tekjuskattur). By contrast, unearned income, such as that from interest payments, share dividends, property rental and capital gains, is taxed at 10% (fjármagnstekjuskattur).
In 2008, an individual in employment earning 330.000 ISK per month would have a tax liability of 83.842 (average tax rate of 25,41%). (In this example, it is assumed that the individual enjoys the single person’s 100% persónuafsláttur). His counterpart, receiving the same gross income from share dividends, interest payments and otherwise unearned income pays less than a third of this, namely 24.044 ISK (average tax rate of 7,23%). This is demonstrated in Table 5.
Table 5 – Income Tax Liability on Earned and Unearned Income
(monthly, 2008)
|
|
Income ISK |
Gross Tax Liability ISK |
Personal Disc. ISK |
Tax Payable ISK |
Average Tax Rate |
|
Earned Income |
330.000 |
117.876 |
34.034 |
83.842 |
25,41% |
|
Unearned Income |
330.000 |
33.000 |
8.95623 |
24.044 |
7,29% |
Thus is the Icelandic tax system regressive; those who (need to) work pay a much higher average tax rate than those whose income comes from existing wealth.24
Men, having both historically and in current times benefited from significantly higher incomes than women, own more property and are as a result much more likely to have unearned income. Prima facie, the differential tax rates between earned and unearned income suggest that women must pay a higher proportion of their incomes in taxation. This requires thorough investigation based on a survey of women and men’s relative positions vis- á-vis earned and unearned income in Iceland in order to bring to light the full impact of these differential tax rates.
Changes for 2009 exacerbate the inequality
The 2009 increase in the tax rate for earned income to 37,2% is not matched by any increase in the tax rate for unearned income which remains at 10%. However, the higher personal discount is discountable against it as before at the same rate of 10/38, i.e.11.107 ISK per month (an increase of approxi- mately 24% from the 2008 figure of 8.956 ISK). Therefore, those whose in- comes are solely from unearned sources will pay less tax in 2009 as they have a higher personal discount but the same marginal tax rate (and this is true at all income levels).
The wage earner on an average wage in 2009 will pay 80.855 ISK in tax, an average rate of 24,41%; his counterpart, receiving the same gross income from share dividends, interest payments and otherwise unearned income pays less than a third of this, namely 21.893 ISK (6,63%).
Table 6 Income Tax Liability on Earned and Unearned Income
(monthly, 2009)
|
|
Income ISK |
Gross Tax Liability ISK |
Personal Disc. ISK |
Tax Payable ISK |
Average Tax Rate |
|
Earned Income |
330.000 |
122.760 |
42.205 |
80.555 |
24,41% |
|
Unearned Income |
330.000 |
33.000 |
11.107 |
21.893 |
6,63% |
Explanations and justifications
Low tax on investment income is fundamental to an economic model that prizes growth based principally on the financial sector and seeks to reward riskier investment strategies. Marjorie Kornhauser explains that “it pro- motes economic growth through the encouragement of risk-taking.” However, with apparent prescience of the current Icelandic situation she also cautions: “[t]he assumption that riskier investments are more produc- tive, per se, than more conservative ones, is not even necessarily true… In short, from some perspectives, the benefits of some speculative investments are themselves extremely speculative.”25 Kornhauser also cites a number of sociological and psychological studies to argue that women and girls are more risk averse than their male counterparts and thus claims that reward- ing the risk-takers through the tax system is a manifestation of male bias and a male dominated legislature.26
The pro-risk model had clearly not gone out of political favour amongst the governing Icelandic administration which instituted these changes (and which resigned in January 2009). By reducing taxes on unearned income whilst simultaneously raising the marginal tax rate on earned income, that government unrepentantly signalled its continuing preference for financial investment and speculation over labour, presumably on the assumption that the same fiscal infrastructure that permitted Iceland to plummet into the economic abyss would pull it back out again.
5. Gender Budgeting in the Financial Crisis
The faces of the financial crisis in Iceland are largely male; the government ministers and central bankers who devised the model; the chief executives and boards of the fallen banks who operated it; the billionaire investors who profited from the “Icelandic miracle.” The consequences are also most visible in traditionally male employment as the first wave devastates con- struction and its subsidiary services. In November 2008, for the first time since 1980, male unemployment overtook female unemployment in both percentage of workers and raw numbers of unemployed.27 However, sec- ondary job losses attributable to the crisis will be extensive in female-domi- nated retail sectors while public sector cuts, for example in healthcare, education and culture will have a female face. These job cuts are more grad- ual but will be relentless and by May 2009, the Icelandic directorate of labour predicts that female unemployment will once again overtake male unemployment.28 With 6350 people unemployed at the end of November 2008 (over 13.000 by the end of January 2009) and only 306 available jobs, both men and women will find new employment hard to come by in Spring 2009.29
The proof of Iceland’s commitment to gender equality comes not from the good years but will be demonstrated when times are more difficult. There is a risk that Iceland’s people will be told that they cannot afford equality in taxation right now; that there are more pressing issues than gender equality; that it will be dealt with in turn but first there is the press- ing matter of returning a few billions of euros to foreign creditors. But Icelandic women and the families they support with their labour cannot afford to live silently with this gender inequality either.
6. Conclusion: The Need for a Gender Budget Group in Iceland
Despite the highly publicized appointments of women as chief executives of two of the three troubled banks, women’s representation in the teams assem- bled to handle the financial crisis remains woeful.30 It may be unrealistic to expect these teams to eagerly take on board a feminist perspective in their work. Such a failure is not attributable to the biological sex of the team mem- bers, but rather because the gender impacts of tax policy decisions are not widely considered even among professional economists; they are not part of basic undergraduate education in the relevant fields of economics, taxation, accountancy or business studies. Instead, Iceland needs a non-governmental team assembled to make a full audit of the current tax code as well as to evaluate every fiscal proposal as it is released in order to advise the govern- ment on the hidden assumptions and unintended gender consequences of its policies. This will have two principal impacts; first, it will facilitate a wider knowledge and understanding of the tax code as it pertains to daily life amongst the general population; and secondly, it will provide opportunities for the government to eliminate the gender bias within the current rules and thus test the sincerity of its concern for gender equality in Iceland.
Endnotes
1. Marjorie E. Kornhauser, A Legislator Named Sue: Re-Imagining the Income Tax, 5 J. Gender, Race & Justice 289 [2002] 323-4.
2. J.A. Kay & M.A. King, The British Tax System 19 (5th ed., 1990).
3. Id., 41.
4. Id., 41.
5. Women’s Budget Group, London, What is Gender Budget Analysis, http://www.wbg.org.uk/GBA_What. htm (visited January12th, 2009).
6. The President of Iceland does not, broadly speaking, exercise political power.
7. Fjármálaráðuneytið, Skipulag, http://www.fjarmalaraduneyti.is/raduneytid/skipulag/ (visited January 12th, 2009); Fjármálaráðuneytið, Starfsfólk eftir skrifstofum, http://www.fjarmalaraduneyti.is/raduneytid/ starfsfolk/nr/1432 (visited January 12th, 2009); Fjármálaráðuneytið, Skipurit fjármálaráðuneytisins, http://www.fjarmalaraduneyti.is/raduneytid/skipulag/skipurit/ (visited January 12th, 2009); Icelandic Ministry of Finance, Departments, http://www.ministryoffinance.is/ministry/departments/ (visited January 12th, 2009).
8. Seðlabanki Íslands, Stjórn og skipulag Seðlabanka Íslands, http://www.cb.is/?PageID=22 (visited January 12th, 2009).
9. Hagstofa Íslands, Laun fullvinnandi á almennum vinnumarkaði eftir starfsstétt og kyni 1998-2007, latest update 16th April 2008 (data downloaded January 12th, 2009). In 2007, full-time male workers receive an average regular salary of 353.000 ISK per month; full-time female workers receive an average regular salary of 281.000 ISK per month. Full-time male workers work an average of 46,1 hours per week (and receive an additional 13,9%) compared to 41,8 for full-time female workers (receiving an additional 5,3%). Full-time male workers receive an average monthly premium of 65.000 ISK per month (18,4% of regular salary) in bonuses, compared to 36.000 (12,9%) for female full-time workers.
10. The flat rate is 35,72% (2008) for all earned income; there are no progressively higher rates for higher earners.
11. Economic inactivity is the term used to describe the state of someone who has no income and is not seeking an income (e.g. unemployed and seeking work). It is factually inaccurate as it very often includes persons who are highly productive, de facto, but their work is unrecognized, e.g. stay-at-home parents of young children. Students are also included in the category.
12. The effective tax-free income is calculated by multiplying the personal allowance by 100/35,72, 35,72% being the tax rate on earned income in 2008.
13. Pension contributions and trade union fees are excluded from these calculations.
14. Hagstofa Íslands, Atvinnuþátttaka, atvinnuleysi, vinnutími og fjöldi starfandi eftir ársfjórðungum 2003-2008, latest update 15th October 2008 (data downloaded January 12th, 2009).
15. Hagstofa Íslands, Regluleg laun á almennum vinnumarkaði eftir starfsstétt og kyni 1998-2007, latest update 16th April 2008 (data downloaded January 12th, 2009). Average regular salary only, defined as “the remuneration for regular working hours, that is ordinary working hours according to collective agreements, both daytime and shift-work hours.” Overtime, sick-pay and irregular bonuses, etc. are not included.
16. Vinnumálastofnun, Working in Iceland, 16 (May, 2008).
17. The primary earner on the minimum wage is not earning enough to fully benefit from his partner’s personal discount. Hence, should she start work, she can apply the remainder against her own tax liability.
18. Hagstofa Íslands, supra note 15.
19. Id.
20. RSK Orðsending nr. 1/2009 janúar.
21. Katherine Rake & Geethika Jayatilaka, Home Truths: An Analysis of Financial Decision Making Within the Home (2001).
22. For United Kingdom research see, id.. For commentary on the American research, see Marjorie E. Kornhauser, Theory Versus Reality: The Partnership Model of Marriage in Family and Income Tax Law, [1996] Temp. L. Rev. 1413, 1420; Marjorie E. Kornhauser, Love, Money and the IRS: Family, Income- Sharing and the Joint Income Tax Return, [1993] Hastings L.J. 63, 90-91; Lawrence Zelenac Marriage and the Income Tax, [1994] S. Calif. L. Rev. 339, 353-355. For international analysis, see, World Bank, Engendering Development Through Gender Equality in Rights, Resources and Voice ( 2001) 154-162.
23. The personal discount is applicable against tax on unearned income at a rate of 10/38. The equivalent tax- free incomes are similar; 95.280 ISK per month for earned income and (presuming no earned income) 89.560 ISK per month for unearned income.
24. Marjorie Kornhauser argues that those who must earn their incomes are already at a disadvantage because of the precariousness of their employment situation. Disability or sickness, for example, can end an individual’s employment income but would have no effect on unearned income. Thus have those with unearned income a greater ability to pay taxes. Kornhauser, supra note 1, 307.
25. Id., 303-4.
26. Id., 304-6.
27. Vinnumálastofnun, Staða á vinnumarkaði, nóvember 2008, Tafla A1 Atvinnuleysi, 10th Dec. 2008; Hagstofa Íslands, Skráð atvinnuleysi eftir landsvæðum og kyni 1980-2006, latest update 12th February, 2008 (data downloaded January 12th, 2009).
28. Vinnumálastofnun, Horfur á vinnumarkaði, desember 2008, 3.
29. Vinnumálastofnun, Staða á vinnumarkaði, nóvember 2008, Tafla A2 Atvinnulausir í lok mánaðar & Tafla C1 Laus störf og ráðningar í nóvember, 10th Dec. 2008.
30. See, supra text at notes 7- 8.
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