Liz Truss to raise income tax thresholds?

[GreenLunchBox]

There are rumours that she's going to increase the higher tax threshold to £80k. I think this is a good idea and will increase productivity. Sunak keeping the threshold frozen was a sneaky stealth tax. In this time of rampant inflation it's unfair for people to receive a small payrise and find themselves significantly paying more tax than before

It will also help with the rental property shortage as it will help to mitigate the unfavorable tax changes for landlords so less will be likely to sell up

@TheSpringyGuyAndTheCheeseEater Are you suggesting single parents should have a doubled tax allowance?

I'm suggesting that the amount that any family unit can earn before tax/ NI is charged should be the same. That the income that any family unit can have before they have to pay higher rate tax or lose child benefit or the personal allowance or tax free childcare should be the same.

It makes no sense that a single parent who earns £50k is charged way more tax than a couple who earn £25k each, even though they have 48 hours per day to split work and childcare between them so their childcare cost will be much, much lower on average already.

It makes no sense for a single parent on £60k to get no child benefit when a couple with a £60k income can still get it in full. It makes no sense for a single parent to lose tax free childcare or their personal allowance at £100k at yet a couple on £199k can still receive both. When the single parent is already juggling everything on their own. Or for single parents to pay 75% Council tax!

The unfairness also applies to single, childless people. And creates a distortion between dual income households with the same household income but where the division of income between the two partners differs.

In short, it is an absurdity and responsible for many of the unintended effects we see in the economy, including very high child poverty rates compared to the countries who tax on a household basis.

Anybody who thinks this is fair has no idea what the word means.

What I have described ^^ is how it works in many, many countries. Because a) it is fairer; and b) it works, to reduce anti-work incentives and reduce inequality and child poverty and increase productivity. It's not rocket science. It's tried and tested, normal tax policy in most places (well, most places where politicians care about their citizens or equality or fairness or future productivity etc.)

And yes, that would be a brilliant place to start. All other thresholds too, to be applied on a household basis. Another effect would be that many more abused or mistreated women could afford to leave horrific relationships when they need to - self-funded - and therefore fewer claims on state funds, fewer issues paying for adequate housing, fewer negative impacts on children that carry through into adulthood. It is a no brainer really. And given how it only affects 15% of families, not that expensive to implement either. But the effect on those households and the children in them and their futures (which we should care about for their own sake! But even if people don't, purely from a productivity perspective) would be enormous.

Can someone point to countries that do this as my google skills have failed me?

Sadly, I don't think they're going to raise the thresholds. They usually leak like sieves to the press and the only thing we've heard about the mini-budget next week is about removing the cap on bankers' bonuses 🙄