Tina Antwi spoke with Dan Boucher, Director of Parliamentary Affairs for CARE
Last week, during passage of the Finance Bill, the House of Commons voted to approve the introduction of transferable allowances for married couples.
The specific measure, making provision for a non-earning spouse to transfer up to 10% of their tax allowance to their earning spouse, was won by 279 votes to 214.
CARE has campaigned for the reintroduction of recognition of marriage in the income tax system since it was removed in 2000. After an absence of 15 years that recognition will return in April 2015.
CARE research has, over many years, demonstrated how one-earner married couple families on average wage have been particularly discriminated against. Their recent International Comparisons 2012 report, published last month, showed that in 2012 the tax burden on a one earner married couple with two children on average wage was 45% above the OECD average.
Tina Antwi spoke with Dan Boucher, Director of Parliamentary Affairs for CARE about this report.
Tina: What led you to do the research for the International Comparisons report?
Dan: We're very concerned to make sure that public policy at all levels upholds family life in the United Kingdom. We were concerned when in 2000 the British Government removed recognition of marriage from the tax system. Up until 2000 our tax system, like most tax systems in the developed world, provided recognition of marriage. Marriage is a very important institution: if you look at both adult and child wellbeing outcomes associated with marriage, those outcomes demonstrate very clearly that wellbeing is better in a married context on average, which from a Christian point of view does not surprise us given the fact that we believe that God has instituted marriage as something that is for our good.
We were very concerned when the Government took the unusual step of removing recognition of marriage from the tax system and ever since then we have been concerned about the negative effect that that has had on the institution of marriage in the United Kingdom. We have been campaigning for the reintroduction of recognition of marriage into the tax system and have been interested in looking at how marriage has been treated better in other countries than in our own in order to highlight the fact that we are out-of-line.
One of the main findings of the international tax comparison research is that a one-earner married couple with two children on average wage bear a tax burden that is 45% greater than the OECD average, that's the average across the developed world: countries like France, America, Germany and Japan. We're basically giving one-earner married couples a harder ride then those other countries are on average.
Tina: Do you think that this has been an issue that was ignored?
Dan: We have been working to draw attention to this issue over a good number of years and this isn't the first report that we have produced. We did a report for the year 2012; we produced one for the year 2011 as well and, going back, in 2010 too. It certainly isn't the first time that this issue has been brought to the public's attention. One of the very significant things that happened back in 2007, in the context of making the case for recognising marriage in the tax system, was that the Social Justice Policy Commission associated with the Conservative Party picked up the proposal that we'd made in relationship to this issue, and others had made, calling for the recognition of marriage back in the tax system. The Social Justice Commission recommended to the Conservative Party that they embrace that commitment and it became one of the headline commitments in the 2010 general election. The difficulty with the commitment is the fact that the recognition for marriage is quite minimal in terms of its value. It proposes a transferable allowance which would allow a non-working spouse to transfer just 10% of their personal tax allowance to their working spouse, so that as a family their tax burden would be reduced a bit. But we have argued in the reports that came out recently that the Government should be moving towards a fully transferable allowance, rather than just transferring 10% of the personal allowance of the non-working spouse to the working spouse.
Tina: According to your report the tax burden on single parents with two children is 30% greater than the 2011 OECD average and 42% greater on one-earner married couples with two children. What do you think is the main cause for the greater level of tax burden on single parents with children?
Dan: Our tax system is entirely based on the individual. Our tax system does not recognise properly family responsibility and that is why, in our judgement, it fails all kinds of families. Two-earner families are ok, but it fails other forms of families, be they one-earner married families or be they single-parent families. Most other tax systems in the world recognise family responsibility and take account for family responsibility; our tax system is pretty unique in failing to do that. The tax burden is adjusted in most other developed countries to regard the fact that in one household you've got four people to support whereas in the other household you've just got one person to support.
Tina: What impact is the tax burden having on single-parent households?
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