Sunday 10 October 2010

Jointly Benefiting?

Let's start by saying that I am in favour of the withdrawal of Child Benefit from my family. We don't need it, and there is no money left with which to pay it.

I have a slight concern that the additional administrative effort in screening for those not entitled to it will take up much (or all) of the saving, and that it is a move away from my preferred system of a Citizens' Basic Income. But these are peripheral concerns.

What does concern me is the inconsistency that this reveals. As I understand it, Mrs P will lose her entitlement to Child Benefit because I am earning above the higher tax rate threshold. Fair enough, we are married. We operate legally, ethically, financially and practically as a single unit. We share everything.

So why can we not share her tax-free and lower-rate allowances? The income that we treat as our joint income is, for taxation purposes, mine and mine alone. Yet for the purpose of Child Benefit, it is suddenly joint again.

Hmmm.

4 comments:

  1. A very interesting point, which I had not seen raised with all the heat being generated by the CB discussion.

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  2. Thanks for letting me know I'd now be even more better off not married, P. I do know this. ;-)

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  3. It took you that long to realise :)

    It's the same for benefit, pensions or anything else btw, pay in the full 2x get out 1.4x

    ---

    Here is another way of thinking about the CB removal:

    A 7% income tax raise on parents, scaled so that the poorest pay the most (someone on 44k losing 3k loses more proportionally than someone on 90k for example).

    Now sit back and imagine if Osborne had been inflicting that
    fairly on everyone in the UK...

    John Galt sends his regards...

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  4. I expect an announcement about married persons tax allowances to emerge just before the next election. Pain today, jam tomorrow, when your vote will be needed.

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