.. to think it's about time we taxed *household* income

[sussexman]

Reading today about the Labour proposal to tax the top 5% more heavily in order to pay for public services. It just strikes me as very old fashioned thinking to not take account of the fact that most households have 2 earners and that it might be better to tax the household income, not the individuals.

Using Labour's top 5% - take a couple each earning £45k - they'll pay 22k this year in tax and NI. If one of them was a SAHP and the other on 90k they'd pay 30k in tax and NI. It seems to me that we could fund better services, both more fairly and without clobering everyone so hard if the household income were taxed rather than the individuals.

None of this is intended as a plea for the rich - or indeed a suggestion as to what the rate should be - just a suggestion on a fairer tax system. AIBU?

[Want2bSupermum]

If filing your own return is of value to you that is an option here in the US. It isn't generally advantageous to do this but it's a great idea when you are separating from your OH and don't want them to see your return. It's also used by some couples who have a large difference in income. It would save us some money to file this way but I can't trust DH to get his taxes done so it would be me doing two returns. Easier for me to have everything in one return.

[Want2bSupermum]

Childcare costs are insane. Working FT I need a nanny for at least the next 10 years and the cost is about $25k a year. It should be an allowable deduction if both people in the couple are working or studying.

[Overrunwithlego]

They aren't they supermum. I've just re-calculated and realise I underestimated - it'll be nearer £95-100k for us all in all, and that in no way equates to full time childcare.

[Overrunwithlego]

• they are, aren't they....

[Want2bSupermum]

Yes it's insane. It's very challenging to find a PT nanny who can help with homework. I have ended up hiring a 3rd grade teacher for 10 hours a week to supplement the lady I currently have. Teachers are not cheap but quality of care is extremely important to me.

[grannytomine]

Many of us campaigned for decades for the rights of married women to hvae a separate tax return and be able to keep income secret even from a husband to ensure women were no longer the property of their husbands. We really must fight very hard to ensure we continue to keep separate taxation of husband and wife. Women fought very very hard for the current situation

But why did you? All you had to do was not apply for the married couples allowance or if you had it then jointly ask for it to be removed. In the early 80s our joint income pushed us so far into higher rate tax that it outweighed the benefits of claiming the married couples allowance. By campaigning what you did was get rid of the married couples allowance for couples who needed it.

[OlennasWimple]

I guess people's personal circumstance will heavily influence their views on this. DH and i have always had "our money", so the US system, which views what we both contribute to the pot as "our money", feels like a fair approach to us.

Wanking - I agree with your thoughts on benefits reforms. There are so many things like this that we could put some proper time and effort into re-shaping, rather than how we leave the EU

[Okkitokkiunga]

I love how on MN it's joint money and the higher earner is financially abusive if they dare keep some money back but actually suggest that tax is paid as a couple and it's loss of emancipation.

I'm a SAHM because childcare would cost more than I earn. Our income is lower than others who get CB but we don't get it. We'd happily be taxed as a household as that would be fair.

I think in France you are taxed at source but then you do a household return at the end of the year. That then takes into account things like childcare and your liability for the year is recalculated.

[Kursk]

sussexman

I agree that it would be difficult to run the government commercially, 800bn USA big sum, I think however it would be achievable IF the population was proportional to the landmass of the UK

[Meluzyna]

@Okkitokkiunga

I think in France you are taxed at source but then you do a household return at the end of the year.

Not at all We are paid "brut" (gross income) as far as income tax is concerned, although the equivalent of National Insurace is deducted at source.
We are now filliing in our tax return for 2016. We pay an "advance" in April of 1/3 of last year's tax bill to save us having to pay it all at once in September when they will have worked out how much we actually owe for 2016. If our income has dropped substantially since last year we don't have to pay the advance ...... it's up to us to decide - but if we don't pay it and owe them money we get a penalty, so most people just pay the provisional amount and then get it sorted in the Autumn.

However, big changes are afoot.... apparently from next January we are going to be taxed at source so we will never actually pay tax on our income for 2017. We'll see how that works.

[scaryteacher]

Granny It used to irritate my Mum no end when she was due a tax refund, and it went to my Dad.

[JanetBrown2015]

My mother who kept my father (a student) for 10 years in the 1950s with her teaching wages says she was the first woman in her town to claim the married man's allowance (as it was in those days).

I want separate taxation of husband and wife. If that actively penalises a non working spouse then I think that's a double benefit as we need stick as well as carrot to ensure women keep up their careers even when they have small children.

I accept that state benefits (not something most of us claim) are based on household incomes as a whole.

[MissShittyBennet]

Not sure you're right about state benefits not being something most of us claim, actually. Not when you factor in CB and tax credits.

[ChardonnayKnickertonSmythe]

So, Janet, why us if fair that taxation is separate and benefit assessments per household?

I can assure you that my job is just as worthy as any other, but it's low paid and I am penalised by this.

[ChardonnayKnickertonSmythe]

Stick and Carrot?
Would you say this about any other low paid or not working person, other than a married woman?

[grannytomine]

scaryteacher, well all she had to do was agree with your dad that they would sacrifice the married tax allowance and it would have all been in her name as mine was. You can't have your cake and eat it but the problem with the people who campaigned to have the married tax allowance stopped was that they were making that decision for people who would have rather had the extra money or maybe even desperately needed the extra money.

[ChardonnayKnickertonSmythe]

I would rather have the extra money instead of the warm glow Janet is basking in.

[MissShittyBennet]

To be fair to Janet, she's been pretty clear in all her various guises over the years that she wants all women who aren't prevented by health reasons to be in the workplace FT, trying to maximise earning potential. She doesn't differentiate by marital status, whether you have children or how old they are. Whether you agree with her or not, and I don't work full time myself, that's a very consistent, across the board message she hammers out. If anything too much so.

[NeoTrad]

In France, household income and capital are the basis for taxation. Macron is proposing to offer separate taxation for couples. Thank God.

Household taxation makes women responsible for negotiating a fair deal with their husbands/partners.

[ChardonnayKnickertonSmythe]

I'm quite weary of people who think they ought to fight someone else's battles, because, more often than not, they have their own agenda.

[jay55]

Benefits per household make sense, so a household with one person earning 100k doesn't get housing benefit, council tax benefit etc when the partner is out of work. It would be grossly unfair to households where everyone works but don't earn anywhere near that amount.

[ChardonnayKnickertonSmythe]

But why is it unfair to the other households, Jay?

The higher earner is already taxed heavily and the lower earner is penalised.

[rayleigh]

Plus the earner on 100k might be abusive and withold any money from the lower earner. There are all the complications about the definition of a couple/household as noted earlier in the thread as well. The lower earner might need childcare help to be able to work. Women should have the right to have their benefits assessed as an individual, for all the reasons why women should have the right to have their taxes assessed as an individual.

MrEBear majority of single parents have no maintenance or any other support from their ex partner. Those that get no support should get the same level of support as widowed parents.

[MissShittyBennet]

Janet absolutely has her own agenda chardonnay, she bangs on about it at every opportunity doesn't make a secret of it.

[Want2bSupermum]

ray I totally disagree that women should have the right to have their benefits assessed independently of their OH. If the OH is being abusive they need to leave and claim as separated.

I also still don't understand why the heck a woman having her own return is a mark of independence. I have my own income and my say in my marriage. It's also a little bit far fetched that households are all financially abusive. Yes it happens but it's not the norm.

I think household returns would be good for families because there would be clear evidence of income for purposes of support. Also any monies due to be paid back are questioned here in the US if the refund paid back isn't returned to a joint account.