The Conservatives again support marriage in the tax system. Any proposal will penalise a number of groups, be regressive, and fail to provide more stable homes.
After much to-ing and fro-ing yesterday, the Conservative party has once again committed to supporting marriage in the tax system. But any proposal will penalise a number of groups, is likely to be regressive, and will fail to provide more stable homes.
As widely reported in this morning’s papers, David Cameron yesterday flip-flopped on his marriage tax plans, first saying “It is something … I’ll definitely hope to do” before later saying “we will definitely do [it] in the next parliament.” On Today this morning, Conservative Home’s Tim Montgomerie confirmed: “What we have is a definite commitment to recognise marriage in the tax system” although it won’t be the expensive £4.9 billion policy originally proposed by Iain Duncan Smith in 2007.
But whichever policy the Conservatives finally adopt will favour old over young. In 1991, 74 per cent of 30-44 year olds were married but the Office of National Statistics projects that only 43 per cent of the age group will be married by 2021 (Table 3a). For the overall population aged over 16, the proportion of married couples is projected to fall from 58 per cent in 1991 to 41 per cent by 2031, as the Chart below shows.
Tim Horton of the Fabian Society told Left Foot Forward,
“When we last had a married couples allowance under the Tories during the 1980s and 1990s there was actually a drop off in marriage. There is little evidence that tax breaks would make much difference. And even if some couples did get together for a tax break it is unlikely their relationships would be as robust as those motivated by love and commitment, which is what actually explains positive outcomes for many married couples.
“What’s more, the Tories’ proposed tax break would unfairly ignore many families, including cohabiting couples, single parents and the low paid. It would also fail to support many younger couples, who often use cohabitation as a ‘practice run’ for marriage.”
The number of cohabiting couples are projected to rise from 2.25 million in 2007 to 3.70 million in 2031. This blog has previously shown that the proportion of households with single parents has risen from 3 per cent in 1971 to 7 per cent in 2008. Marriage is also more common further up the income scale as this analysis of IDS’ proposals has shown.
UPDATE 14.58:
Giles Wilkes also has an excellent piece on his Freethinking Economist blog outlining why the Tories are “on the back foot on marriage”
UPDATE 15.16:
And Chris Giles of the FT has just posted on how “transferable tax allowances are a terrible idea” and that “It wasn’t nutty progressives who got rid of the married man’s allowance and undermined the married couples’ allowance in the tax system. It was a combination of those awful lefties (Nigel Lawson, John Major, Norman Lamont and Kenneth Clarke)”.
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16 Responses to “Young and poor among losers of Conservative marriage policy”
Claire Spencer
Great post by @wdjstraw @leftfootfwd on Tory marriage policy http://bit.ly/7iWsd2 Also read this by @hannahnicklin: http://bit.ly/5McA8Q
hannahnicklin
RT @thedancingflea: Great post by @wdjstraw on Tory marriage policy http://bit.ly/7iWsd2 Also read http://bit.ly/5McA8Q by @hannahnicklin
Michael
The argument from social trends really is just silly, especially when it is precisely those social trends that, it is contended, are problematic. Challenge this assertion by all means, refute the evidence of course, but to merely embrace social trends without refuting the argument that these social trends are inherently problematic seems bonkers. Or cowardly.
As for the tax evidence, I wonder if you have not got things the wrong way round. It’s not really about giving a tax-break to those who are together; rather it’s about negating the tax-incentive for people breaking up, an incentive that has played its part in ‘family breakdown’. Whatever the nitty-gritty details that may need ironing out (on which I confess I am no expert) I think this is the core of the argument – and it is laudable.
These kind of arguments, from the realms of those who claim to represent the poorest (whilst championing policies which, evidence would suggest, hits the poorest the hardest), always leaves me wondering if there is not some alternative agenda here.
For anyone that might be interested, I have blogged about this previously – http://wp.me/pJiP0-2F, and also here http://wp.me/pJiP0-1R
Ben Cooper
RT @MTPT: Excellent piece from @leftfootfwd on why tax system recognition of marriage is regressive and won't work: http://bit.ly/7iWsd2
Ben Cooper
RT @thedancingflea: @leftfootfwd on Tory marriage policy http://bit.ly/7iWsd2 Also read this by @hannahnicklin: http://bit.ly/5McA8Q