To think married couples should be taxed together

[OneAmberFinch]

Philosophically, I think it's a couple's business how they divide their responsibilities between earning and working in the home, and the tax system should treat them as a single unit.

I would extend this to tax on investment products as well: currently, virtually every serious product (available to the masses i.e. not custom family trusts etc) is in a single person's name. For example, there are barely any joint savings accounts that pay a decent interest rate, pensions/ISAa are in individual names etc.

If there were a simple way to tax jointly, I think more of these products would exist.

Why do I care about this? Because I think it would solve quite a lot of the issues that come up on MN w.r.t. money in relationships - "you can't take a 3-year maternity leave, or if you do you need to beg your DH to donate to your pension".

I don't think it's enough to just be able to inherit someone else's pension/savings - beneficiaries can be changed. I think throughout life, many couples would like to truly manage their finances jointly, but the tax system and types of financial accounts available don't make it possible.

@MrsBennetsPoorNerves im sorry I really don’t get where you’re coming from.

Family is earning more money. Family pays more taxes. Like it is now if one individual is suddenly paid more.
I'm struggling to see a situation where one person working would increase the taxes so much that it would make the family worse.

There is an issue with childcare, one that exists anyway. In part because childcare costs are seeing as an expense for the mother rather than a family expense….

im of course assuming the threshold fir moving from one tax band to the next would be different than they are now!

From a purely personal perspective, I do believe that the optimal arrangement is for all responsibilities to be shared between both spouses. But that's not actually the point.

I think it's absolutely fine for families to opt to have a SAHP if that's what they want, and it isn't really my business to interfere with whatever arrangements work for them, simply because I happen to have a different opinion about what might work best.

So I am not suggesting that we should be deliberately engineering society to actively incentivise women to go back to work or disincentivise people being SAHPs. I genuinely don't care how other families choose to organise their lives if what they are doing works for them. I just don't want to introduce a system that would almost certainly make it harder for women to go back to work if they want to do so.

If we lived in an ideal world where there was perfect equality between the sexes, women weren't seen as the default carers, and there were no controlling men or abusive relationships, then I would absolutely see the logic of what you are proposing. But sadly, we don't live in an ideal world and the power dynamics in relationships are often less than equal.

I could not support a policy which might work very well for healthy, happy families, if that policy simultaneously meant that some vulnerable women would be trapped into staying at home against their will and denied their financial independence.

In France the whole household (kids and all) is considered when calculating thresholds and allowances. Seems fairer, given the cost of bringing up children.

I don't understand what you don't understand.

Take, for example, a woman who has been a SAHP and wants to go back to work part time. She will earn £12k in that part time role. Under the current system, she would pay no tax on that. But if her allowance had previously been transferred to her husband, he will then have to start paying the tax that he was previously saving because of her allowance. And if that change potentially pushes him into a higher tax bracket, then the financial impact could be significant.

The effect of this is that his income will go down and she will effectively be paying a higher marginal tax rate. The family might still be better off overall if she goes back to work, but the financial benefits of her work will be reduced, which may affect decision making.

Now, all of that might be fine in an equal relationship where decisions are mutual and both partners are respected equally. But in relationships where there is already an imbalance of power, I would not want to introduce a new dynamic whereby an controlling and entitled man feels aggrieved by his perception that his wife going back to work will cost him in his pay packet...where men are the main earners and women don't have full access to family finances, there would be a further incentive for the man to pressure his wife to stay at home.

Who is talking about transferring allowances?

As for the ‘but the person on the lower wage - like £12k - will be paying more taxes than they should’…. That only holds if you still think as people who are independent financially. When the whole point is to think about them as a unit. The same way we think about it for UC (and it’s considered normal…..). Or when there is a divorce….

Personally I find it unfair that a family who is earning £30k+£30k is paying less taxes than a family earning £60k+£0k
Why is one family paying more for what should afford you the same financial input??
Same with child benefit - why is it that two parents earning £40k each receive it but not one parent at £80k plus a SAHP?
and the free childcare hours….
These were systems built on the assumption that women are either not working or working with much lower wage so you didn’t need to take them into account. Maybe it’s time to move on from that?

If people want to not work that’s their shout, but I am totally against the state altering the tax system to support that choice

No. Thats basically subsidising men to have a housewife.

Don't people get it? We don't have enough people working. Why would we want to do somethinh that encourages more families to only have one adult working?

Personally I find it unfair that a family who is earning £30k+£30k is paying less taxes than a family earning £60k+£0k
Why is one family paying more for what should afford you the same financial input??

Because the family with two people working is contributing more economic value. The whole point is to incentivise people to work, not to not work.

Mrsbennettspoornerves has it bang on

The thing is it does actually save a lot of money as well. If this SAHP was working they would be sending their child to full time childcare which cost the taxpayer money.

Ah but you see it doesn't. All those people using childcare provides lot of jobs, which keeps other people off benefits and paying tax. Plus the person working provides output into the economy, which results in their employer generating income & being taxed on it. Then you have the extra employers NI that person's employer hands over to the taxman, and the fact that someone working is likely accruing pension so less likely to need financial support in their old age.

It is nearly always better for the economy for people to be working, than not working, even with childcare costs.

@oohlarlar It is nearly always better for the economy for people to be working, than not working, even with childcare costs.

^ This, exactly, whether you like it or not. If people are fortunate enough to be able to afford to be a SAHP and this is what they are truly choosing to do, then of course that's fine. But expecting the tax/NI system to actively support this choice, well, no, that's not fine. Not fine at all.

BlueTitShark.
Personally I find it unfair that a family who is earning £30k+£30k is paying less taxes than a family earning £60k+£0k

The family earning £30k+£30K will have significantly more work related expenses than the other family. They will both have to pay for work clothes and travel expenses plus they will have to source childcare. The family with a SAHP will have not have childcare expenses.
The most important point, as explained by previous posts is that the family with a SAHP is not contributing to the economy.

As for the ‘but the person on the lower wage - like £12k - will be paying more taxes than they should’…. That only holds if you still think as people who are independent financially. When the whole point is to think about them as a unit.

@BlueTitShark, yes, that's exactly the point. I want the tax system to regard people as being financially independent and not to regard married couples as a single unit, because I think this is in the best way of protecting the interests of women. Especially vulnerable women.

But those people are working. Just unpaid. I don’t get what you mean we need more people working. The issue is people on benefits not people not working per se.

If the family wants to avoid the cost of childcare, cleaners, after schoolcare etc then who cares.

I have no issue with people choosing to SAH if that's what works for their families, but surely you can see that it isn't as simple as you are suggesting.

Yes, we have to consider what the government is spending, and that's where the concerns about the benefits bill tend to arise. But we also need to think about what income the government has coming in from tax receipts in order to be able to cover that expenditure.

If someone is in paid work, they will be paying tax. If they're paying for childcare or cleaners etc, their childcare workers and cleaners will also be paying tax etc. So, while there are many variables that inevitably make the calculation more complex, there will generally be more money going into the exchequer from a WOHP than there would be from a SAHP.

I'm not saying that there is anything wrong with people choosing to SAH if that's what suits them and their families. But it is not an economically neutral decision.

Working people contribute to the economy, though.

They do charge tax on joint savings though. It does exist. You each declare half the interest (or the interest earned on the share of the beneficial interest).

If the higher earner wants to share they can top up the other's pension and ISA anyway.

What do you mean there is no incentive to get married? Yes, there is no immediate short term "money in your pocket" financial reward (and I agree there shouldn't be), but there are longer term rewards when it comes to inheritance etc, which are far more impactful and needed