A care time benefit as a timely alternative for the non-working spouse compensation in the Belgian tax system

Over the past decades, the growing labour force participation of mothers has rendered the Belgian personal income tax system increasingly outdated. Especially the marital quotient system - that allows spouses with monetary income to transfer part of their tax base to a spouse without monetary income - is no longer a tax allowance that compensates childcare efforts. It rather has become a subsidy to older cohorts for their past childcare efforts. As an alternative, we model in this article a system that is geared towards the effective care trajectories of nowadays parents. We thereby follow earlier ideas of Hilde Bojer, Patricia Apps and Ray Rees to reflect care efforts in the tax base of individuals. Following Bojer, we propose a system that incorporates a socially grounded amount of childcare time in household income, and simulate this with the Belgian microsimulation model MISIM. The amount relates to the number and age of children and can either be procured through childcare services or self-provision. In the proposed system both market- and self-provided care result in a similar ubsidy. We elaborate a monetary estimate of self-provided childcare on the basis of the detailed information of time use in the Flemish Family and Care Survey (2004-2005). For discussion we provide an overview of potential drawbacks and advantages and evaluate the redistributive impact of the simulated alternative.