Personal taxation is based on income (and sometimes wealth). Progressive taxes are those which take a larger proportion of the income/wealth of richer individuals than of poorer individuals. Since women tend to be poorer and have less wealth than men, more progressive tax systems benefit women.
An important issue for personal taxation is whether couples are taxed jointly or as individuals. In many countries, people pay income tax on their own income alone, but in others married couples are jointly taxed. Since women are more likely to be out of the labour market and often earn less when they enter it than their partners, joint taxation tends to penalise women. This is because a married woman entering the labour market is taxed at the same rate as her husband, which in a progressive tax system will tend to be a higher rate than if she was taxed on her (generally lower) earnings alone. So, under joint taxation she not only pays more tax, she also has a greater disincentive to taking employment. Joint taxation is theoretically gender neutral, and these considerations would apply to a man who was the second earner too, or to the second earner in a married same-sex couple. However, in practice it is women who tend to take on the couple’s caring responsibilities so that women’s employment is more prone to being seen as secondary, even more so if it would entail additional costs of paying for replacement care.
It is often claimed that even if a tax system taxes women’s income more heavily, this does not matter if the whole household gains. However, it cannot be assumed that the benefits of increased income are shared equally within households. Research has shown that relative earnings and employment status matter greatly to how much individuals benefit from their household’s income. Therefore it is important that neither the tax system, nor the tax system in combination with the social security system, discourages women from employment.
Women without employment who are financially dependent on their partners are particularly vulnerable to poverty if their relationship breaks down, and especially if they have children. Tax/benefit systems should be designed to discourage such financial dependence.