Sunday 17 January 2010

Tax households, forget marriage

There are a lot of thing wrongs with the British tax system, but one of the most obvious has to do with the way household income is ignored versus individual income.

Take two households (of two people) earning £50,000. In one, a single earner earns all the money; in the other, it is divided. The tax paid by the former is far, far higher even though the expenses of living are essentially the same.

This is clearly not fair and is dealt with in other countries, such as the United States, by a combination of allowances and household income tax tables to even it out. Not in Britain.

Something should be done to rectify this. It hits hard a lot of reasonably paid, but still not rich people who for one reason or another live on the earnings of one person.

The Tories say they plan to change the law in this regard, but unfortunately as is the case often with right wingers they have muddied up a fairness issue with a social issue. They claim they are going to adjust it to encourage marriage.

Marriage has nothing to do with this. It is households that we should be looking at -- how many people live on how much money. Partners -- gay or straight -- should count, not some quasi-religious notion of what constitutes a proper couple.

The law needs to be changed -- but out of fairness not because of a social engineering agenda.

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