Tory Marriage Tax - makes me feel a bit icky

[HohohoBumperlicious]

Am I right to feel a bit - for want of a better word - icky about marriage tax. I am married but it just seems wrong to put a financial and moral (as after all the root of the tax is surely a moral one) premium on marriage.

It's not always the best state and certainly isn't one that should be the default, it is, after all, a purely social construct designed to fit in with perceived views on what is 'moral'. I'm sure people can be perfectly happy and good members of the community without being married.

Am I missing the point somehow?

Good point... Can't imagine anyone thinking that's fair.

Haven't read whole big thread - I don't want a tax break for marrieds necessarily, but why can't we do a tax break like some other countries do ie if living as a couple on 1 salary, then working partner can take on the non-working partners tax free allowance, so a couple would get a £6000 tax free allowance?

Of course the definition for 'couple' could be controversial...but it could possibly enable some couples to cut back on both working FT and (if one of the partners wanted to) SAH to care for their kids/care for their partner?

belledame and her beatitude how very true and terrible

bring back the backers of this 'policy' and let's see them answer this

I don't think anything is fair in the case of the 'dumped wife', losing a tax break would probably be the least of her worries.

I'm quite confused about the whole thing. It seems to be a question of moving money around for PR purposes.

As I understand it, single folks who live alone get a rebate of 25% off their council tax. Which for me would equate to £500 a year. So if you are on a low income (taking home less than £200 a week) it's quite a significant saving being single as is.

If we take it as read that tax/NI on basic income is about 30% and you earn £20K you are going to pay £6k a year in tax and NI

If you are on a higher rate you can pay about 40% (I do, it may even be more than that, my accountant would know but he refuses to talk to me this early in the morning ). If you are single and on higher rate, the saving you get by being single is frankly negligible (yes I know it's the same number but if your take home is £800 a week, then saving £500 a year seems small bananas IYSWIM).

So first point - breaks for both single and married people are intended to only help those on lower incomes and not those who earn more than £65K per year gross as a household. Frankly, once you get past that point, you are on your own and get as much off as you are willing to pay your accountant to wangle.

Second point - if you increase the taxable allowances, by a few thousand selectively (ie for those already married) they get slightly better off. Which means they can probably afford childcare if they have kids and makes getting both parents at work more likely. The sum total result of this is that there is on average more taxable income coming into the system, so there is an economic argument for doing so.

Doing so just for married people: - well there's a good argument for doing so there as well - married couples require two people to agree to make changes to their working situation so it's less likely they will. I'd give up jobs at the drop of a hat when single and childless, but now I have a nanny, career, husband etc. I'm more likely to be cautious because DH would not be chuffed with me.

Long post, so I will summarise: there is less of a total effect by reducing taxes on the affluent but overall, in total the income to the govt would be likely to rise, so it's a sensible move.

Doing it by marriage may also be sensible but it is in no way proven and morality based taxes will alienate as many as it will aid.

But I don't think the state should kick her when she's down, Bacon, do you? Seriously? do you think the state should punish her and reward the man who walks out on his marriage and into a new one? No-one expects life to be fair, but for the state to back up the right of spouses to walk out on their marriages by rewarding them with a tax break while removing the tax break from the dumped party (who generally has the extra expense of children) seems utterly bizarre and wrong to me. And er... it doesn't actually look like it's backing marriage, it's certainly not backing the marriage of the dumped party is it?

I'd also like to know if it applies to civil partnerships.

NotAnOtter, either Brown or Darling, I'm not sure which 1 and unfortunately it looks like the Lib Dems did too 2 I think they might have been meaning rich women without young children but it sure wasn't clear.

And yes, of course it benefits families where one person is a higher wage earner the most - but then divide my husband's salary by two and it wouldn't be above the higher earnings level.

HerBeatitude - But how many husbands leave their wife and remarry right away? Because they'd have increased taxes in the short term from losing their exes allowance. And I do not think it's sensible to base all policy on the case of the divorced wife - surely the settlements from divorces in an ideal world would handle that for individual cases.

Ah but then, abdnhiking, it's not actually sensible to base any tax policy on the marital status of anyone when so many variables exist...

It is, in fact, discriminatory.

Well it would be nice if we lived in an ideal world, but we don't. I can't imagine an average woman having such an advantageous divorce settlement, that it compensates for the loss of a tax allowance. The Ivana Trumps of the world are few and far between.

And I still can't get over the concept of childless people with double incomes having a tax allowance unavailable to single people with children. It is just wrong.

Does anyone know if it will apply to gay couples in civil partnerships, or just formal marriages?

you speak so much sense her beatitude

Why thank you ma'am

Good point about civil partnerships.

Personally I can't see how a committed relationship is made better by a bit of paper.

Then again it might work better if the couple were religious and believed god wanted it to work. So perhaps it should be only those married in a 'proper' church.

I'm sorry I ever replied to the issue about divorce... it's not something I have personal experience with and I should always keep my mouth shut when I'm not well-informed.

But, the fundamental issue for me is that the tax structure should take into account the number of dependents. Children are accounted for with child benefit (which is more generous that I think this tax allowance will work out to be). No matter how you look at it, I am (financially) dependent on my husband and this is currently not included in any way in the taxation structure. I guess that's my main and final point and I'll stick with it. How this could be implemented to ensure that no one is disadvantaged is another story (enhanced childcare support for single parents?).

I think that's my main problem with it. As I said earlier down the thread, I do think the work SAHMs do, ought to be recognised in the tax system, but I have a major objection to childless couples getting a tax break at the expense of single people with or without children. I just don't see why they should. If I thought the Tories were going to go through the options and do something complex which compensated those who aren't married, then I wouldn't have a problem with it. And I still don't know if it will apply to civil partnerships! (If it does, it will really piss off the blue rinse segment of Tory voters.)

The WAY they seem to want to do it (officially married only) is almost certainly wrong.

As for the idea of the single people supporting the children of those who choose to have them (which I suppose already happens with child benefit) I'm not entirely sure about that. It might be right or it might be wrong. I reckon I could make a convincing argument for either side.

Maybe there should be a national debate on that basic principle before they go working out a way to do it with tax.

At the risk of being totally utterly flamed - here goes, and this is a genuine question that has always bugged me - why is it wrong in principle that this tax break would only be for married couples (and, as I believe it should be, those in civil partnerships?) I can never understand the argument that a piece of paper doesn't matter in a committed relationship. If it was that committed you'd surely be prepared to get that piece of paper to give yourself, and any children of the marriage, more security and better legal rights.

Can someone who isn't married explain to me why they don't want to do this, and why they still feel they should get all the rights of those that do. And I'm not talking about getting married in church or anything like that, just the basic legal commitment.

It's like that couple who got themselves on the news by trying to demand a civil partnership instead of a marriage. There is a civil partnership for opposite sex couples and it's called marriage! What on earth is wrong with that?!

And I'm not talking about whether it should apply only to only couples with children - that's a whole different question.

I don't really think polly tonybee's example is all that relevant, to be honest. Emotive, yes. But it's not really relevant to the pooling of tax allowances for married couples.

The poor abandoned wife is going to suffer financially, practically and emotionally no matter how the inland revenue calculates taxation. That's a simple fact. The husband-stealing floosey is going to benefit financially (and probably practically and emotionally) from getting married too because that's how these things go (at least until the feckless husband leaves her for an even younger model). Each household (and the feckless husband, because he is part of both households) might benefit from the pooling of tax allowances when calculating taxes for the household. However, that would depend on which partners are working in each marriage.

The only difference is that currently the tax allowances of any SAHP in either marriage are not taken into consideration when calculating taxes on the household income while under the Tory proposals they would be.

We're only talking about savings on the tax payable on that personal allowance here, not a 'bonus' of the entire allowance itself too.

I still think it may well be a sensible proposal, given that marriage (and civil partnership) are a very practical way of determining what counts as a legal household. I'd prefer that all sides would cease with the moralising about it though.

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FWIW: I am not, and have never been, married. I was a single-parent to DS1 for many years until I met DP and we shacked up and had DS2. I work full-time and DP will do so too once he finds himself a proper job. This means that I am arguing for a policy from which I am unlikely to ever benefit, even if I were to get married.

Sorry, that should read 'each married household might benefit from the pooling of tax allowances'.

The abandoned wife would also benefit from the same pooling again if she were to remarry. If she doesn't remarry, she'd still be entitled to her own personal allowance in calculating the taxation for her single person household.

The floosey only managed to steal her husband, she didn't steal the abandoned wife's personal allowance.

Earlier on it was reported on the news that the Daily Mirror's correspondent in Afghanistan had been killed. He has a 14 month old baby (as well as another child, I think).

It instantly occurred to me (because of this thread) that under these plans, his wife would lose her married person's tax allowance, because er, she's no longer married. As would all the other wives, of all the soldiers who are being killed in Iraq and Afghanistan.

Sorry I just can't get over this. HOW are the Tories proposing to recognise the greater expenses and difficulties, associated with having children for ALL families, not just married ones? Onagar, your suggestion that a debate is to be had aabout whether single people should support children is a good one - are we going to decide as a society, that getting married is more valuable than having children and recognise that in the tax system?

Surely the financial difficulties of the war widow (who is also the most emotive case I can think of) should be addressed through specific benefits for widows and financial schemes provided by the MOD. I don't know what currently exists, but this would seem the way to help out women in this situation.

In any case, setting the emotive aspects aside, the only difference is that her personal allowance is taken into consideration in the taxation on the family income (if she's a SAHP) while her husband is alive. After she is widowed she retains her tax allowance but she loses her husband (and his income). Frankly, the loss of her husband is the real problem here, as it would be for any widow whatever her husband's profession happened to be.

Sorry to be so cold about it all, but I really don't think picking out whatever emotive examples one can think of is all that helpful.

HerBeatitude this is something I am able to comment on, as my husband does a job more dangerous than most and there have been unfortunately more than a few deaths this year. In awareness of this, he's well insured. If he was to die, I wouldn't need to worry about the small amount of benefit I would miss out on as a single parent instead of a dual parent household. (Though I've lost a lot of sleep worrying about how I'd emotionally cope, especially when he's away with work.) This type of extreme case is not relevant to the current discussion.

As for our soldiers - if their wives/husbands are not well supported by a combination of insurance and pensions, then this is criminal and I would happily campaign on their behalf. But this is such a different order of magnitude to a few hundred pounds a year.

And other widows?

And other women not married, with children, whose partners die?

do we want the tax system to disadvantage them? do we think that's desirable, because the benefits of rewarding marriage outweigh the injustice of a financial sanction against those not married?

I am going to sign off this thread as I think we're not actually discussing anything anymore. I do care about other individuals but I don't think that means that a current flaw in the tax system can't lead to careful changes. As monkeyfeathers has said much better than myself (thank you), this to me is not rewarding marriage but acknowledging family income for tax purposes as well as for tax credits. And before I go away, I just want to say that as one of the people defending this proposal, I would be more than happy for it to be extended beyond marriages and civil partnerships to any family unit regardless of marital status.