Tax and the Family have written to Sajid Javid, the new Chancellor of the Exchequer, about the way families are taxed and in particular about the high marginal rates of “tax” so many taxpayers with children face. Figures seen by Tax and the Family suggest that the State takes back from a third of all families with children 80%, or in some cases 90%, of any new income.
Read MoreIn a letter to John McDonnell, Shadow Chancellor, Tax and the Family has welcomed the importance he attached to making work pay for families in a speech at the launch of the Resolution Foundation’s report on Living Standards (Living Standards Audit 2019). The letter draws attention to the very high marginal rates – often as high as 90% – faced by a large number of families.
Read MoreRobert Joyce, Deputy Director of the Institute for Fiscal Studies (IFS) told a meeting to mark the 50th anniversary of the founding of the IFS that spending on in-work benefits had trebled since the late 1970’s - we are now spending more on working age benefits than we spend on education, more than on defence and policing combined.
Read MoreSoon more than one in five families with children are set to lose at least some of their Child Benefit, the IFS warn. This is because the benefit starts to be withdrawn once a family’s income exceeds £50,000 – this threshold has remained unchanged since 2013. If it had been indexed in in line with prices the withdrawal threshold would now be £55.000.
Read MoreThe Institute for Fiscal Studies and Tax and the Family have both called for changes to the High Income Child benefit. The IFS say that without a charge to the £50,000 threshold one in five are likely to lose the some of all of their child benefit. Leonard Beighton says that the original intention was that the charge would affect only families in the top15% of the income distribution. The reality, he says, is that the charge affects families far lower in the income distribution but does not affect all those in the top 15%..It also results in some larger families having a marginal tax rate of 82.24%
Read MoreThe Financial Secretary to the Treasury, Mel Stride, told Parliament that it was“deeply undesirable” that families can have a marginal tax rates as high as 73% or more.
Read MoreThe income tax Personal Allowance is to be increased to £12,500 and the Higher Rate threshold is to go up to £50,000 in April 2019. The Government’s Manifesto commitment to increase the threshold to £12,500 by 2020 is being met a year early. What is there to dislike about that? There is quite a lot actually to dislike!
Read MoreLord Lawson, Chancellor of the Exchequer from 1983-1989, tells Tax and the Family in a filmed interview, that independent taxation was introduced to end the discrimination against married women and in particular married women who stayed at home to look after children. Independent taxation has not, he says, worked as he envisaged. It is not as fair as he intended.
Read MoreTax and the Family have released two new research papers. One compares tax burdens in 2018/19 with those in 1990/91, the first year of independent taxation, the second estimates the amount families need to earn to be out of poverty.
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