Economic Justice: Creating a Level Playing Field
The average mother no longer has the choice to be based at home to care for her child. Two incomes are necessary to survive.
One of the causes of this is an independent taxation system, which almost alone in the world, ignores the dependent nature of the family.
This has had a cruel effect on families. It has penalised families where one parent stays home to raise the children. It has meant some families are better off apart than together, and instead the welfare system has had to step in to support families, trapping many in a system dependent on state handouts and almost impossible for most to break free.
Taxation is the reason why so many mothers have to go out to work but still struggle to make ends meet.
We need a fairer family taxation system.
Households on £30k, where a parent stays at home, are taxed double the amount as those where parents work.
Some families are financially better off apart than together by £12k.
Nearly half of all families with children are caught in a tax trap. It is almost impossible for primary earners to bring home extra disposable income, which in turn forces the mother into paid work to plug the income gap.
Some families caught in the Child Benefit Tax Charge are in the poorer 50% of the population while some of the richest families continue to receive it.
Mothers at home are not aware that by not claiming their Child Benefit (because of the tax charge) they lose their contribution to their State pension.
Treating the family as a unit should be the first principle of family taxation.
Individual income is not a measure of how well off a family is. Net household income is a better measure.
MAHM would like to see:
An economic level playing field for parents who stay at home with the option of being taxed as a household with a transferable allowance for couples or an additional person’s allowance for single parents
Fair taxation for those who stay home and those who work
Childcare subsidies to follow the child, with parents able to choose whether they use it to stay home, or give it to a grandparent, childminder or external setting for care
Child benefit to be distributed fairly
All mothers to be eligible for their state pension regardless of whether they sign up to the Child Benefit or not
MAHM campaigning with Tax & Family at House of Lords
‘The problems families face today stem from the introduction of “independent taxation” in 1990.’
Useful links.
MAHM Tax Booklet.
Download our booklet, Who Cares About The Family, for further information regarding how current taxation puts many single income families at a disadvatage.
Tax and the Family.
A great website with resources and information about how the tax system affects families.
Lord Lawson interview.
An video interview with Lord Lawson about independent taxation produced by Tax and the Family. He brought in Independent Taxation; has it turned out to be fair?
Mothers Matter podcast.
In this episode, Don Draper, from taxandthefamily.org, explains why the UK is one of the world’s harshest tax regimes for families. What can be done to help families out of poverty and give them choice to care for their children themselves.
Further research articles.
Tax after Coronovirus.
This is our submission to the Treasury Select Committee Inquiry: Tax after Coronavirus. We addressed the question: ‘Which areas of the tax system are most in need of reform, and which are best left alone?’ Focusing specifically on income tax, our document highlights the pressing need for a fairer family taxation system.
International Tax Comparisons.
A new report by CARE and Tax & the Family compares the direct tax burden, income tax rates and effective marginal tax rates of various households in the UK with similar households in other countries in 2018. It shows yet again that households with children continue to bear a heavier share of the income tax burden than they do in other countries and many face much higher marginal rates.
Treasury Committee submission.
Claire Paye’s submission to the Treasury Committee Childcare Inquiry. The cheapest option for childcare is to remove discrimination in the tax system so that parents can care for their children at home if they choose to. Childcare can be expensive as long hours in childcare can have a negative effect on children’s mental health, which costs the Government in the long term.
Protect your state pension.
Make sure you register for Child Benefit even if you’re no longer entitled to monthly payments – because it protects your NI contributions for State Pension for those with children under 12. This is important. Take time to look at the legislation carefully so you don’t miss out on pension provision when you are at home caring for family, whether you are the mother or the father.
Cuts that cost.
Research from The Children’s Society and the National Children’s Bureau has shown funding to help children and young people before their problems spiral out of control has been cut by 55%, leaving children and teenagers at greater risk of suffering longer term difficulties.
Couple ‘penalties’.
A couple with two children may need to earn more than twice as much as a single person without family responsibilities to have a basic standard of living and as a result pays five times as much tax. Income tax takes no account of family responsibilities. This press release from the IFS explains the UK’s current system of ‘penalties’.
Example Letters.
Treasury: Member Response.
A member wrote to her MP about the unfairness of the present taxation system. Her MP, Meg Hillier, forwarded her letter to the Treasury whose reply was dismissive.
MAHM and Tax & The Family helped with drafting a response to this letter, in particular, pointing out the irony that, although the Treasury stated that it could not contemplate taxing families as a unit because ‘This fundamental principle [of independent taxation] provides everyone with absolute confidentiality for their personal tax affairs,’ our member has had penalty fines for a tax charge on child benefit where—for tax purposes—she needed to know the salary of her husband even though she herself received no benefit.
