Stop raising personal allowances and start rewarding marriage

Jul 6, 2018 by

by Nola Leach, The Conservative Woman:

At present in the UK we have a tax system that discriminates against families. CARE’s most recent research showed that at the average OECD wage (£36,571) the tax burden on one-earner married couples with two children is 20 per cent higher than the OECD average. This is an extraordinary figure. The unfavourable position of single-earner families is mainly due to the fact that our income tax system does not take any real account of marriage or family responsibilities.

To understand how we got into this mess, we need to go back in time. Income tax was formally introduced in 1842. Back then, for the purposes of tax, the income of a married woman was treated as that of her husband’s. When the Conservatives came into power in 1979, it was felt that change was needed. The times had moved on and besides, the way a married woman’s income was treated raised privacy concerns.

[…] It’s fascinating to trace this shift in our tax system. The individualised nature of taxation has had economic consequences. But it’s contributed to social problems as well. It’s no coincidence that over the same period as the shift to a tax system that discriminates against families, we’ve also witnessed a rise in family breakdown. We also know family breakdown now costs £51billion, up from £37billion just ten years ago. If you make marriage fiscally unattractive, the result will be more cohabitation. This is fatal for the stability of family life.

In the UK today, children are more likely to own a smartphone than have a dad. Lacking proper role models, there is a notable absence of respect for authority. A major report into street gangs back in 2009 by the Centre for Social Justice identified drug use and family breakdown as the major reasons children join street gangs. Tragically, for some belonging to a gang gives a security utterly lacking in the family home. The amount of violent knife crime in London and around the country, much of it related to gang conflict, was up 21 per cent in the 12 months until September 2017.

Again, it’s no coincidence that family breakdown is having a negative effect on young people’s mental health. Research by the Marriage Foundation identifies family breakdown as the chief reason for poor mental health amongst children. Those from broken homes also often suffer from significant self-esteem issues.

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