Income Shares is the second of two formulas hurriedly adopted by state governments in 1989. It is used by California, Pennsylvania, New Jersey and 30 others. (To see which formula your state uses, go to guidelineeconomics.com and click on “Which State?” in the left margin.) Since it’s problems are more subtle, describing it will take two columns. It’s very name gives away the first problem. It’s function is not child support. That is, the idea is not so much to cover the costs of raising a child as ensure the child has the same income available to it as if a divorce never happened. A child should enjoy the same standard of living – get the same theoretical “share” of each parent’s income – as he or she would had the marriage remained intact. This “same income available for care,” whether used for care or not, and using “standard of living” instead of actual costs, sounds subtle but represents a major policy shift in child support that few are aware happened. That will be the subject of another column, as this one is to describe Income Shares. [I am not a lawyer and this is not legal advice. Use a lawyer and economics expert for your case or lobbying.] Unlike percentage of obligor, at least it takes into account both parent’s incomes. It does not account for the effect of child tax credits or time with each parent, except in some implementations or as deviations which are well worth seeking. Worse, it does not account for divorce. The premise sounds good. Divorce of the adults should not effect the children. The purpose of our laws should be to protect children from the effects of divorce, irrespective of the effect on the parents. There are just a few problems with this besides only protecting children from the economic effects while ignoring the more significant emotional ones. The economic flaw would be stated like this: As there is a utility cost to having children, so there is a utility cost to divorce. If a couple has children, they voluntarily assume additional costs in exchange for the non-monetary benefits of children. By the same token, if a couple chooses divorce, there are additional costs to bear to enjoy thebenefits of that, such as a second household and travel for the children. This formula is immediately in trouble with a foundation in un-reality: pretending there is no divorce, or it can have no economic impact felt by all. The reality is there will be two households, and two households simply cannot be sustained at the same standard of living as one, on the same income. What would be more reasonable for no-fault divorce is to assume that both parents bear its utility cost, either equally or in proportion to income. While assuming a divorce never happened as far as the children are concerned would make an excellent premise for custody arrangements, it is unsustainable for financially ones. Seeking “same standard of living” not only requires sole custody but no visitation, for it requires one household. One parent must be denied housing or their standard of living must drop enough to sustain, not simply the child, but the pre-divorce custodial household: absorb the custodial parent’s share of the utility cost of divorce, when neither the divorce nor custody arrangements may have been the payer’s choosing. If you have every intention of seeing your children at all, you have grounds to call this formula arbitrary as it fails to take into account your ability to care for them at an equal standard of living. You can see why an expert witness in economics is needed to present this, but also that he’d pay for himself.
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