Budget: No tax break for married couples

The BBC and Comedy Central are carrying news that there will be no new tax break for married couples in this year’s budget. The measure is in the coalition agreement, with Liberal Democrat MPs free to abstain. The BBC also reports significant unrest on the Conservative backbenches where many are calling for a new tax break to sugar the “pill” of equal marriage. However there are still plans to introduce a limited transferability of the personal allowance between partners this parliament.

I find the idea that the government knows the best way for you to define your relationship supremely arrogant, and the idea that it should offer a small bribe for your compliance absurd. Do these people not realise that society no longer moralises about relationships. These days it moralises about what you eat and drink and how much carbon you emit. Taxes on sugary drinks and minimum prices for alcohol are much closer to where society is at than incentives for marriage.

But I understand why some conservatives (and not just Conservatives) are filled with terror. They see prescriptive attitudes as part of the fabric of society and as these attitudes melt away they fear a descent into chaos. The reality is very different – people generally make better choices for themselves than authorities can make for them. What this means for the “fabric of society” is worth a book of its own, but concerns about the “youth of today” are nothing new. The atomised individual is probably not so atomised as they were before the internet. And with the dramatic long term decline in violence, it is doubtful much credit is due to the prescriptions of the past. So I would hazard that the fabric of society is doing just fine, in some ways is better than ever, and is enhanced not diminished by freedom, openness and tolerance.

But forgive me if I appeared earlier to support the shift in moral calculus from relationships to diet. What you put in your mouth is your own business, but how you treat other people is of supreme ethical significance. So shall we call for a tax break for those who behave decently to other people? (No we won’t.)

* Joe Otten was the candidate for Sheffield Heeley in June 2017 and Doncaster North in December 2019 and is a councillor in Sheffield.

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  • I have to say that the ‘pick your own morals’ attitude is very self-centered and, in my mind ultimately dumb. I have no doubt that history will judge our generation as immature and selfish.

    It also seems clear to me, and reams of research confirm, that family breakdown is the cause for so many of our society’s problems.

    Treating relationships as a commodity, and something that we can simply do away with once we tire of it, is nothing new in history. But this kind of attitude never lasts long and never works. The amount of single mums where dad’s just don’t care about there responsibilities, is a disgrace. The highest in Europe I believe.

    The idea that one can’t judge another is also ridiculous. To say that we have nothing to learn from another is the height of arrogance.

    Finally, may I suggest you do some research on the emerging generation Y Mr Otten, research shows that, unlike the current generation, they are very pro marriage and children. No doubt as a result of being victim to the ‘do what I like and no one can judge me’ framework that is bound to fail.

    I applaud this governments attempt to encourage people to stay together.

  • A tax break for married people is in fact a way of punishing single people, widows, widowers etc. and for that reason I oppose the measure.

  • Old Codger Chris 3rd Feb '13 - 4:13pm

    I believe that in France income tax is levied on households rather than individuals. Wouldn’t this be a fair and logical approach to the whole system (married or not)?

  • Alex Sabine 3rd Feb '13 - 11:43pm

    @ Old Codger Chris

    You’re right that many other countries levy income taxes on a household rather than individual basis (as we do with the benefit system). This has the advantage of taking into account family circumstances, but the downsides of greater complexity, potentially less independence/privacy, and often a discrimination between the married and unmarried that is difficult to justify.

    In the US, for example, there is a ‘standard deduction’, broadly similar to our personal allowance, that is double as much for married couples who file returns jointly as for those who file separately, and in between for so-called ‘heads of household’ (unmarried individuals with family responsibilities). Many other countries have some form of transferable tax allowance for married couples.

    (As an aside, it’s interesting to reflect that it was actually a Tory Chancellor who decided to introduce independent taxation of men and women – Nigel Lawson – and one of his successors, Norman Lamont, who first reduced the value of the married couple’s allowance. For these Thatcherites fiscal conservatism evidently trumped the social variety!)

    My objection to the idea of a transferable allowance or similar reform is not that it is weird, unusual or extreme; on the contrary, it has a perfectly respectable pedigree and we in the UK are the exception rather than the rule in this regard.

    But – as a matter of simple fiscal arithmetic – to grant a tax advantage to one set of people necessarily disadvantages others, and when the basis for that differential treatment is a personal choice about whether or not to get married, that strikes me as none of the state’s business.

    Conservatives will argue that the state has an interest, indeed a duty, to support an institution that underpins social stability. If we grant that for the sake of argument, is a tax break really the best way to do this? To have any chance of influencing people’s behaviour (ie to get married or stay married) the financial advantage would have to be pretty sizeable, in which case the fiscal discrimination against the unmarried would have to be significant. If supporters of a marriage tax break aren’t willing to acknowledge this implication, they should stop making exaggerated claims about its behavioural effects.

    All in all it doesn’t strike me as nearly as attractive as allowing people to keep more of their own money irrespective of household type, and – as Joe says – leave them to define their own relationships unbidden.

  • Alex Sabine 4th Feb '13 - 12:03am

    Some good background on this subject in the UK context here:

  • Joe is right, the argument should be about fairness, not social engineering – unless the Lib Dems are becomeing a yellow Labour party.

    Two families, each with two children, both earning 40000 in total should have the same take-home. That’s why fairness dictates that the allowance should be transferable, whether between married couples or potentially just between parents (maybe between unmarried or divorced ones too).

  • Old Codger Chris 4th Feb '13 - 9:44am

    Alex Sabine – Thanks for that, very imformative.

    If the UK were to switch to taxing households it need not discriminate between the married and the unmarried. But I imagine it would bring with it arguments about whether or not Mr A was co-habiting with Ms (or Mr) B, or indeed with his wife or civil partner. Rather like Council Tax and the Benefits system.

  • Peter Davies 4th Feb '13 - 2:49pm

    It is a valid principle that couples should not be treated differently from two single people. It is also a principle that a couple should be treated the same regardless of how they divide their paid and unpaid contributions to the household (currently a couple with one full-time earner is over £2000 p.a. worse off than if they split the earning between two part-time jobs). We have opposed this measure because the Tories promoted it deliberately to break the first principle but to my mind, the second is more important because people might actually make work decisions based on tax incentives but logic seldom has a part in relationships.

  • @Peter Davies

    The problem many modern LibDems will have with allowing couples to divide their income between them for tax purposes is down to the simple reason of maths; it will be the “better off” who will benefit most fro this change …

    Also (because of the maths) I suspect a significant number of higher rate tax payers would suddenly become basic rate tax payers and hence entitled to other benefits such as child allowance, blowing an even bigger hole in the governments finances…

  • Peter Davies 4th Feb '13 - 3:52pm

    For benefit purposes, household incomes are already combined. If they were not, the unwaged partner could well claim job-seeker’s allowance. This is worth far more than personal allowance. If the Tory proposals were implemented, married couples with one earner would only be better off than those designated as “living together as man and wife” for benefit purposes. They would still be much worse off than a landlord and tenant or a brother and sister sharing.

  • @Peter
    Yes the government has created a set of rules that ensures it does quite well out of ‘married’ couples and ‘households’ to the detriment of the people in those arrangements. I also seem to remember that in implementing ‘civil partnerships’ certain groups (such as people caring for a relative) were excluded because they stood to gain from the arrangements.

    Something many single people (who haven’t been married or investigated the tax system) have little idea about.

    I’m actually all for a full 50-50 split of income for tax assessment purposes between couples and can even see grounds for including the children in such arrangements, particularly given the general position the courts start from in divorce cases. This obviously goes beyond what is being discussed in the context of the coalition agreement.

  • @Joe All whip and no carrot – certainly not liberal thinking.

    @Joe Otten
    >Taxes on sugary drinks and minimum prices for alcohol are much closer to where society is at than incentives for marriage.

    Yes taxes and credits/rebates/benefits have two purposes, one to encourage good behaviour and secondly to penalise anti-social behaviour. So if you believe that taxes should be on ‘bad’ things rather than on encouraging good behaviour then by implication you also support the abolition of taxes on earned income – or is earning an income also a social evil? 🙂

  • Greenwashed 20th Feb '13 - 5:05am

    No question that the present tax system discriminates against married couples. Married couples share and split household duties: Only one may work, particularly if the couple have young children, and one will take care of the children. Once children are at pre-school or school age, the stay at home parent may go back to work part time or full time. Among other benefits, this ‘system’ keeps half of all UK children out of infant care and day care centres, which cost the UK government a fortune, It also helps to produce the next generation of taxpayers who will be funding most everyone’s retirement!

    Married couples should have the option of filing a joint household tax form, where each spouse’s PERSONAL allowance would be added together and taken into account against the married couple’s combined income.
    The current system increases tax on married couples and encourages mothers with young children to enter the workforce, thereby depositing their children in a government paid for daycare. This costs the government a great big pile of cash in childcare costs and really benefits no one. I am sure that common law couples could be recognised and benefit from this as well, presuming they are actually living together.

    The current system benefits singles in the short term, but likely benefits no one in the long run. The long term result of this is: lower birth rates, more working parents, children rarely seeing their parents, more child behavioural problems, more immigration, etc.

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