David Cameron has finally given in to his backbenchers and promised to introduce a tax break for married couples in the next few weeks. Even David Cameron does not really support the policy. As Iain Dale put it in a blog last week “David Cameron and George Osborne keep paying lip service to this idea in the vain hope that it will keep Peter Bone and Mrs Bone happy if somewhere at the end of the rainbow this promise is ever introduced, but the truth of the matter is that neither Prime Minister or Chancellor gives a monkey’s cuss about this policy..”
The marriage tax allowance is one of the more illiberal policies the Tories have dreamed up. It is not a coincidence that it’s part of the suite of Private Members Bills which make up the so-called Tory “Alternative Queen’s Speech” – along with bringing back the death penalty, banning bhurkas, having a referendum on equal marriage and having a Margaret Thatcher Day. It’s not about helping kids or supporting families. It’s actually a way of the state interfering in people’s private lives, something Liberal Democrats have always opposed when there is no good evidence that it would help the vulnerable or achieve a valuable public policy goal. The government may wish to “promote marriage” for vague or even populist reasons, but in the absence of evidence that marriage itself (as opposed to other factors, such as higher income) is the best way to live or bring up kids, the Government has no business using the tax system to promote it. Don’t Judge My Family, the campaign against the marriage tax allowance, has attracted support from people across the country, angry that in this day and age the Tories feel government should be using public money to make a purely political gesture on this area of life.
A marriage tax allowance would not even go to all married couples. It’d only go to those couples where one person stays at home and one person goes out to work. So not content with saying “marriage is best” without any research support for the idea, it also says “having a breadwinner and homemaker is best” too. In 2013, it’d be funny if it wasn’t such an outrageous use of scarce public funds. Nick Clegg was right when he said “We should not take a particular version of the family institution, such as the 1950s model of suit-wearing, bread-winning dad and aproned, home-making mother – and try and preserve it in aspic.”
He also said that “open society liberals and big society conservatives will take a different view on a tax break for marriage.” Indeed the Coalition Agreement (pdf) stipulates that Liberal Democrat MPs may abstain from any vote for it.
Lib Dem MPs, as we know, are more respectful of the Coalition agreement than their Tory equivalents. It would be of huge benefit if Lib Dems make clear not only that they oppose the policy, but that there will be a manifesto commitment to its reversal. I would urge all Liberal Democrats to speak out against the marriage tax allowance and promote the diversity of family life in modern Britain. If back-bench MPs decided the vote against the policy, I would hope the whips turn a blind eye.
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34 Comments
Completely with you on this Evan!
Damn straight!
Evan
Presumably you would be equally in favour of removing the penalties maried couples face in applying for benefits (e.g. joint income assessments for tax credits). A relationship blind tax and benefits system would be no bad thing, a relationship blind tax system together with a relationship sensitive benefits system seems a bit of an oddity.
Oh and also would you equally stand for removing the ability for people who recieve blind person’s tax allowance to transfer that to a married partner? If not, why should blind people get a marriage tax allowance whilst fully sighted people do not?
(DOI – I recieve blind person’s tax allowance, possibly the strangest and hardest to justify benefit still on the books)
Simon
Why is removing the couples penalty “illiberal”? Or is everything you don’t like ” illiberal”?
I agree with you that making this only for people who are married, but being a ‘stay at home mother’ is virtually impossible as a choice for the majority of mothers these days. I earn a good wage, with my wife staying at home to look after our 1 year old. However we are really struggling to make ends meet with this arrangement, particularly with the utterly unfair method of tapering child benefit recently, where my next door neighbours who both earn 30K a year are still getting it when we get hardly any
The current tax and benefit regime is saying you BOTH must work and that is the only possible arrangement and then use 90% of your partners salary to pay for the childcare you now need. Great for the government as there’s more taxation going on, but allowing no choice for most about how to bring their children up
For me I’d make it a transferable tax allowance for parents with children below school age. In this way you can help families that want to make that choice without giving out a freebie to families who are rich enough to not need two people working. It’d be a good compromise, I think the tories would find a hard time arguing it as the ‘stay at home mother’ is the person they always bring up when this policy is put forward.
Tories are trying to make all women unemployed, and even worse they are now trying to give the other partner a tax incentive to maintain the unemployment.
The Tory policies in this government have been a disaster for women and women’s rights. The vast majority of cuts have come directly from women’s pockets, while the bonuses have gone to men. Most of the jobs lost from the public sector have been women’s jobs and women’s wages. The government has forced the newly unemployed women to “donate” their skills for nothing, to work full time without a wage through workfare schemes, while cutting back welfare support.
I wanted to like this government but it is sick, vile and disgusting.
so it seems even though i am married i still would not qualify for this as we both work full time, we dont have kids so from this goverment and the previous we get nothing , zero, zilch, we do not get any tax credits of. any description as we dont have kids, the married tax break still would give us nothing, so why call it a married tax break if you get penalised for working, i remember the old married persons tax where all married people got something whether they had kids or not at least that was fairier, this and he previous useless goverment love to penalise you for not having kids,
Please don’t make this a women’s rights issue. If anything this is giving women more choice. This is about choice of whether a woman can stay at home to look after her children in their early years or is forced to work and then use childcare to make ends meet.
A huge amount of women would love to stay at home to look after their children especially when they’re young but cant afford it. Plus there are a growing number of stay at home dads that would like this flexibility. Being able to transfer tax allowance to the higher earner – man or woman, especially before children are school age would really help a lot of young families.
Evan and others miss the point, what is really wrong with this concession is that it is a political gesture rather than a well thought out policy, with it’s various caveats to deter people from actually claiming and to trip up those who do claim. Also the government isn’t using “public money”, it is merely deciding the arrangements legally available to a married couple to reduce the amount of tax they pay.
It is obvious that what this policy should be, is for personal allowances to be fully transferable between two people in a legally recognised relationship ie. civil partnership or marriage. However such an arrangement would have a large take-up and so reduce income tax receipts (it would have zero impact on NI), something the government is currently wanting to avoid. Yes those who choose not to enter into a legally recognised relationship loose out, but that is their choice.
Perhaps people should pay more attention to the words ‘Personal Tax Allowance’ . It is an amount per person that they can earn tax free per Tax year. Trying to pass that allowance on to some-one else due to some view that being married trumps all other scenarios would only weigh the tax burden overall more heavily on those that are not married or where both partners earn at the level of the tax allowance or more. The idea that it would ‘reward’ some relationships but not penalise others is very naive.
I thought trying to bribe people with their own money went out with Labour. Petition signed.
Certainly will not be signing. The current benefits system gives me absolutely nothing for being unemployed after the first six months because the state declares that my spouse will totally support my every need, and we need nothing else, because she works. Contrast this with a school-leaver who has never worked, or contributed, with two working parents, who is suddenly awarded over £50 per week as an ‘independent adult’, despite having no liabilities and continuing to have essentials provided for by mummy and daddy.
This measure would do more for me than the £10K personal allowance. Granted, limiting it to a married couple is far too limiting – it should be available for civil partnerships and co-habitees. ANY situation where the benefits system would disallow a claim because one partner is presumed to be supported by another, should allow unused tax allowance to be transferred.
A better system would be to allow anybody not using their personal allowance to claim back the cash equivalent (a maximum of £2000 for those with zero income based on a £10000 allowance). Benefits would be reduced by the same amount so most people would receive exactly the same amount. Tony however would get an extra £833 in his own account in a way that nobody on either side could pretend was a reward for marriage.
Typo: Should read £83.
or better still £166.
@Peter Davies
You seem to be suggesting a Benefit rather than a Tax Allowance.
What’s the difference?
There’s plenty of sound reasons to have the tax and benefits systems aware of “relationships”, notably that there can often be an unequal division of labour and income between the participants, by mutual agreement. The objection is to making them specific to certain kinds of “approved” relationship. Ideally the system would just be householded (if you live together and share everything then to some extent you are a single entity for tax and benefit purposes), but for practical reasons it runs in pairs.
However, if you take as given that you need a system based on exclusive pairings then the obviously liberal solution is to say that any two people (plus optional dependants) who live together can declare themselves to be “a household” for tax and benefits purposes, if they so wish.
That’s not very different to how it works today. (Many aspects of the system work this way, some do not)
Peter, I’m a little surprised that you don’t see a difference.
A Benefit is largely means tested and something you get which is paid out of tax revenues contributed by others, hence would be recorded as government expenditure. Whereas a Tax Allowance is something you (or your partner with respect to a transferable allowance) can use to reduce your taxable income, with only the final (reduced) tax receipt being recorded as government income – hence no “public money” is involved.
If I’ve understood your approach, effectively you are giving everyone a “citizens income” of £2,000 and abolishing the personal allowance. I don’t see where the extra 833/83/166 figure come from.
@Roland
Well everyone gets the same amount, some people would get it in their pay packet as a tax allowance, some people would get it by bank transfer as a benefit. Which method you choose doesn’t have to relate to your income. A £2000 per year tax credit would produce identical results in the real world but would increase the headline tax-and-spend figure by £2000 per person (and this really matters to Tories).
The £166 is a monthly figure. Unlike tax allowances, this works exactly the same whether your accounting period is a year or a day.
Sorry I have tried to comment but my phone keeps playing up and posting things before I’ve finished. I basically wrote an unfinished essay before so please delete that and I agree with everything Gareth Wilson said.
Many people do feel a commitment of two people to lifelong support of each other and the children their relationship produces is in the whole a a good thing and should be encouraged. The wording used here comes across as a snide attack on such people. I appreciate that if one considers the details of how this thing would work, there are plenty of reasons for being critical of it. However, the wording of this article suggests to me the criticisms are really secondary to the real reason which is a hatred of anything to do with religion and a traditional sense of morality.
I don’t see a hatred of anything to do with religion and a traditional sense of morality – just a desire to avoid the state imposing it on those who don’t share it. The complication comes from the fact that the current system judges families and many of liberal instincts have been left opposing the judgemental rhetoric and supporting the judgemental reality.
I do wish the liberal democrats would stop describing this as tax relief or endlessly quote how unfair it is to war widows to gain a populist view against it. The fact is a family where one stays at home pays more tax per household than a household with two earners, this is nothing to do with marriage or tax relief. Nick Clegg talks about choice whilst ensuring families where one stays at home by choice or requirement is unfairly penalised to the tune of their entire tax allowance. Even the tax credits system which uses gross household earnings takes no account of the tax allowances so dual earner household get credits and benefits when there equivalent single earner household gets none. If the liberal democrats wanted choice and equality for families they would propose a bill that supported families pooling their tax allowance, whether married or not and also support them if they chose to go down the chilcare route. Even Vince Cable agreed it was unfair but said he wouldnt do anything.
@CP “Tories are trying to make all women unemployed, and even worse they are now trying to give the other partner a tax incentive to maintain the unemployment.”
Given that over a million private sector jobs have been created during the period the Coalition has been in power they are obviously doing a bad job.
Changed my mind on this
Did not like as first as the thought of subsidising people to get married was ridiculous. However, the proposal is not a subsidy for marriage but for the stay at home spouse. There are many potential benefits from this, not just for bringing up children. Benefits include more people getting active in the community and at last some support for carers.
One of the most negative trends I have observed over the past 30 years is the busy ness of people between the ages of 25-45. It is hard to find people of that age involved in any community activity. Councils for example tend to be dominated by the over 60s with perhaps a handful of enthusiastic youngsters. When I was at college , there used to be a lot of people around with time on their hands to meet for a coffee or help with needy causes.
The tax relief could also support carers, millions who currently give their time and effort for free saving the tax payer £billions. Thus I would extend the relief to those in a caring role, even if they are not married to the person .
As for raising the money , a Land Value Tax would be a good start. I certainly would oppose any further cuts in benefits for the poor and vulnerable.
@ Nick
‘The fact is a family where one stays at home pays more tax per household than a household with two earners, this is nothing to do with marriage or tax relief’
‘Even the tax credits system which uses gross household earnings takes no account of the tax allowances so dual earner household get credits and benefits when there equivalent single earner household gets none.’
Really excellent points. I agree with you the pooling of a families tax allowance could be an excellent Lib Dem policy, as long as it not tied up with the insistence on marriage. The tory’s push the policy in the belief if more people were married we’d revert to some 1950’s golden age of morality, whereas the Lib Dems could use it to give families MORE choice in how they bring up their children, whether they’re married or not.
Peter Davies
I don’t see a hatred of anything to do with religion and a traditional sense of morality – just a desire to avoid the state imposing it on those who don’t share it.
Maybe you don’t, and maybe it wasn’t intended, but I feel the snide tone of the words Mr Harris chose to use here will be read by quite a few in this way. If a similar snide tone were used to comment on any other living arrangements or personal belief, it would be regarded as offensive.
Some commentators appear to be accidentally or perhaps deliberately mixing Tax allowances with current Benefit rules. There is indeed a very good case for stopping the way pensions and other benefits actually discriminate against couples by paying them less than than the total of two individuals pension/benefits, but the idea of making the personal tax allowance transferable as a ‘fair’ thing to do is very mistaken. It would be an admin. nightmare and the only real winners would be those couples where the sole earner is in the higher rate tax band. Hardly a priority when the jobless will now lose the first weeks benefits for no real valid reason 🙁
Mark Seaman
It would be an admin. nightmare and the only real winners would be those couples where the sole earner is in the higher rate tax band. Hardly a priority when the jobless will now lose the first weeks benefits for no real valid reason.
Indeed. But I think this point can be made without making snide comments which suggest that anyone who thinks there is some value in the idea of the marriage commitment is some horrible illiberal type, or who pooh-poohs what they value as silly and outdated.
@Mathew Huntback How to you work out the only real winners are those with a sole earner in a higher rate tax bracket, the winners are any families where the income is not exactly the same for both parents.
ie. Single earner family with a gross wage of £19000 would be taken entirely out of tax if a full transferable tax allowance was introduced for families.
How can this be anymore of an admistrative nightmare than the ridiculous child benefit fiasco that now pluges so many people into having to do tax returns that otherwise wouldnt need to and further beats the stick over those that look after there own kids.
It seems when liberal democrats say choice and equality for women they actually only mean choice as far as they choose the path that liberal democrats want. Why should a family that has one parent look after the children and the other work be looked down as an outdated 1950’s institution that should be iradicated at all cost.
Families whether single income, dual income or single parents should be supported to an equal level so we could have a system where the family tax allowance is calculated on dependants so that single parents who work are not penalised as well as single income families. Obviously dual income families would not benefit as much but inequalities in wages would be smoothed.
Sorry Mathew I meant to reply to Mark Seaman’s comments
Nick, also you got the spelling of both my first name and my surname wrong. The -bach ending in my surname is found in placenames in the West Midlands and Welsh borders, Sandbach being the largest example of a placename with this ending. See here for an explanation of my surname’s origin.
Sorry Mathew I am writing this on my phone!