The British tax and benefit system penalises people who get married despite the wealth of evidence that points to the social benefits of marriage.
Many opinion polls show that the British people support traditional family values and over 80% of young people still hope to get married one day. A YouGov poll for The Daily Telegraph in October 2004 showed that 'tax breaks for marriage and the family' was the sixth most popular policy amongst floating voters.
This public enthusiasm for marriage leads to very occasional talk in Tory circles about using the tax and benefits system to support the aspiration to marry. Governments rightly support other socially-useful aspirations (including the aspiration to learn, save or start a busness) and so why not support an institution that - according to mountains of evidence - is so good for children?
Some social liberals object to any use of the tax and benefits system to favour the institution of marriage and believe that the state should be neutral in its treatment of "alternative lifestyle choices". There are two problems with this "Neutrality" position, however.
Unmarried families cost the taxpayer money
"Alternative lifestyle choices" often cost the taxpayer a lot of money. The growth of lone parenthood has been the fastest growing cost facing the welfare state and children in non-married families tend to give less to the economy in future years and demand more police and welfare resources.
Getting married is financially penalised by the government
The second problem with the "neutrality" position is that marriage is currently disadvantaged by Britain's tax and benefits system.
In 'The Lone Parent Trap' the Civitas think tank documents five cases where the tax and benefits system penalises marriage:
"How does welfare policy in Britain affect the decision to marry? This fact sheet looks at five case studies. First, imagine two biological parents who have one child and who live separately. If neither works and both claim benefits, they would be worse off if they married. Second, if the same lone mother is not working and the father works full-time at the minimum wage, they would be worse off if they married. Third, if the lone mother works part-time and claims working families tax credit (WFTC) and the father works full-time at the minimum wage, they would be worse off if they married. Fourth, if they both work full-time at the minimum wage, they would be worse off if they married. And finally, if she works full-time at the minimum wage and he works full-time at double the minimum wage, they would still be worse off if they married. In all cases, depending upon whether figures are calculated before or after housing and childcare costs, couples who marry stand to lose from 7% to 28% of their former income."
Through a programme of targeted tax cuts George W Bush abolished America's marriage penalty.
Interestingly every single example there is of a marriage penalty that arises from benefits, not from tax. Perhaps benefits increases, rather than tax cuts, are more appropriate.
Posted by: Richard Gadsden | July 16, 2006 at 12:30 PM