Sunday Times calls for a family friendly tax system
Jonna Noble, money editor at the Times and Sunday Times in an article ahead of the Budget has called on Rachael Reeves to create a family friendly tax system. The present system, she says, is almost entirely focused on individual income and pays little attention to family finances. Tax and the Family have been saying this for many years.
Here is an excerpt that details the issues that families face under the current tax system:
For a start, we need a tax system that is family friendly. Ours has focused almost exclusively on individual incomes and paid little attention to household or family finances. We have a situation where two families with exactly the same household income pay vastly different amounts of tax, and so have wildly different levels of disposable income. This has been further exacerbated by the fact that the provision of child benefit, tax-free childcare and 30 hours of free childcare are all based on individual income.
Politicians often like to highlight the benefit of the marriage tax allowance, but it’s worth a pitiful £252 a year.
Then you want to encourage hard work. The 60 per cent plus marginal tax you face if you earn between £100,000 and £125,140 is beyond punitive. It doesn’t make sense that these workers pay much more than those on higher incomes. It discourages them from taking on extra work and pushes them to find ways to lower their taxable income or, if they are self-employed, even stop working for the rest of the year. In what other parts of the world would someone not be able to afford a payrise because the tax system will penalise them?