Monday, 18 January 2010

No To Tax Breaks For Married Couples

Full disclosure: I am married, and would hence benefit from any such tax breaks.

So, why do I oppose such tax breaks, just like some other commentators? After all I would be quids in if any government decided to introduce tax relief for married couples. Furthermore, having no children (at least not yet), I'd be doubly rewarded, as I could spend all the money thus gained on my good self (a new boy's toy, anyone?).

This is, when you boil it down to its very essence, because I firmly in a few things: that all people should be treated equally (no caveats!), that less fortunate (through no fault of their own!) should be helped by the society, and finally that all children should be given an equal start in life. Believing in those three things, and taking the policy of tax relief for married couples to its ultimate conclusion, I find that I cannot support it. It is plainly unfair, and cannot be fixed in a real world (for how it can be fixed, in an idealistic world, please read on). For those who still have some doubts, here is my reasoning behind this, in greater detail:

Here I am assuming the current UK system as a starting point, mostly because this very issue has been revived here as a part of the, already heating up, election campaign. The system currently has no financial incentives for marriage, and has a fairly nice system of financial support for single parents. Conservatives are the challengers, and are bandying tax breaks for married couples as one of their election promises.

Now, with battle lines drawn, on to the battle itself!

In my opinion, even if tax breaks for married couples are, in real terms, equal to support single parents get, the system is arguably still unfair. On closer inspection, the reasons for this should be more or less obvious.

Single people only qualify for support if they have children. If married couples without children received tax breaks (i.e., state support by another name) it would amount to unfair and unequal treatment. Even if a married couple had children, and especially if one of them didn't work, it can be shown easily that they can easily arrange their lives so they spend less on child care than a single parent - kindergarten obviously not required if one parent is unemployed, and if both parents worked, they would likely earn more in aggregate, and thus find child care more affordable, than a single parent would, in most cases.

So, will the proposed tax breaks be means-tested, and dependent on the particular circumstances of every married couple, to make them fairer? Probably not, as that tends to make the system prohibitively complex and expensive. Once you start to analyse how to make the systems entirely fair it quickly becomes obvious it probably never can be, unless we had infinite funds and resources to run it. But then, if we did, we probably wouldn't need to help out anyone in the society, let a lone happily married couples.

Also, what about couples who live together as married, with or without children. Surely those would have to qualify for some tax breaks, too, especially the ones that did have children. And if a married couple divorced, and one partner married again, unless the single parent benefits kicked in and were equivalent to the tax break, it would mean that people could use marriage and divorce as a weapon against ex-partners (especially the ones without children, as they wouldn't even qualify for the single parent state support).

And so on, and so on...

I am sure there's lots of other holes to shoot through a system where marriage per se was rewarded by the state. Do note also, that I do not think single parent support should be given out unless means-tested. I believe that any such system of support, in the final analysis, has to have children's benefit at its heart, or in cases of extreme poverty the well being as a fellow human. if you agree that all children should have the same chances in life, and if you agree that all human beings deserve a minimum of well being and dignity, I do not see how you can support tax breaks designed to enrich only a certain class of people, and only as a reward for a personal lifestyle choice, a choice that in the first place does not benefit anyone else but themselves.

While a child support system that unfairly benefits single mothers, and especially those single mothers with numerous children if they're not employed, such a system can be fixed in the real world. There is some tweaking required, but it is eminently possible. But, as I said before, a system of tax breaks for married people, even alongside single parent support, cannot realistically be fixed in a society that needs such systems in the first place. Unfortunately, we still live in such a society. Our luck is that it is just rich enough to be able to help less fortunate. The last thing we need is for it to start benefiting the ones who are fortunate already.

PS
This post is the expansion of a comment I left for The Economist short blog entry by Bagehot, already linked to at the top.