After last spring's Federal Court ruling that it was discriminatory to tax the payments that a divorced parent with custody of the children receives from her ex, the federal government had bravely waffled. Even as it appealed the judgment to the Supreme Court, it promised a broad reform of child-support arrangements to ensure custodial parents were properly compensated. It seemed a solution was in sight that did not involve bending the tax system out of shape. Sanity reigned.

Now a report from a task force of federal and provincial justice bureaucrats has revived the taxation issue. The report, on which the new federal policy is expected to be based, recommends shifting the tax to the non-custodial parent - the one making the payments. That is the position taken by many feminists, for whom the issue is as simple as he and she: he, usually the non-custodial parent, can currently deduct the payments for tax purposes, while she, usually the custodial parent, must declare them as income.

This is the least relevant aspect of the issue. There's nothing remotely discriminatory about the current tax treatment of support payments in gender terms. Yes, he gets to deduct his share of the upkeep of the children under this provision, while she does not. But she qualifies for various other parental tax benefits; he does not. And, of course, she gets the kids. He just gets to write the cheques.

At this point, people like me often say that she may well be better off under current law than she would be in the alternative. That's because the custodial parent - oh, who are we kidding, the man - most often earns more than the woman. When support payments are taxed as her income instead of his, the overall burden on the couple is accordingly lighter. So not only is it possible to fully offset her tax liability in setting the level of payments - a process known as "grossing up" - but she might actually come out ahead, if the two arrange their affairs so that she shares in those tax savings.

One problem with this argument, of course, is that it ain't necessarily so. Judges do not always gross up support payments adequately. More fundamentally, it's not clear why society has an interest in subsidizing divorce. Married couples have no such ability to transfer income between themselves in order to minimize their taxes.

On the other hand, as with custodial and non-custodial parents, divorced and married couples aren't really in comparable situations. Not only are two households more expensive to keep up than one, but married couples enjoy other tax benefits not available to suddenly-singles. And again, only one member of a divorced couple gets to live with their children. So while a married dad can't deduct money spent on the kids the way a divorced dad can, he should count his blessings.

Rather than justify it as some elaborate indirect subsidy for divorced couples, it seems to me the real argument for the status quo remains one of equity. While the Federal Court found the present law discriminatory on the strange basis that custodial grandmothers do not have to pay tax on payments they receive from the child's natural parents, this pales next to the inequities that would be created by reversing the tax onus.

There are two axioms of tax fairness: The tax you pay should depend on your ability to pay (vertical equity), and people in like circumstances should be treated in like manner (horizontal equity). Taxing the payer of child support, rather than the payee, violates both principles. The money he is required by law to send her every month is income that is wholly unavailable to him; the money she receives is income that is available to her. His standard of living is lowered, hers is raised, yet under the task force's proposal he's the one who would pay tax on the transfer. His tax is no less, indeed, than if he were a carefree bachelor, with no children to support.

Not convinced? Try this. Two single moms, one widowed, one divorced. Each has one child, each has total income of $40,000. But whereas the widow's income is all from employment, the divorcee gets $10,000 of hers in support from her ex. Their income is the same. Their child-care costs are the same. Yet one pays more tax.

If current child-support arrangements are to be made more fair, it will not be by making the tax code less fair. If courts are not setting support at adequate levels, if divorced fathers are not paying the amount ordered, let the remedy be applied closer to the source.