British tax and benefit system favours single parents

Carolyn Moynihan

Does the British government actually not want some people to marry? It rather looks like it, judging by the financial penalty many couples face as a result of the tax they pay and the benefits they do not receive. In fact, it looks as though the government wants those who are married to split up.
An analysis of 98 couples with different earnings and numbers of children carried out by the charity Care showed that 76 of the couples would be better off if they split up and claimed welfare benefits that average £8007. Increasingly it is middle-income families where both parents work that suffer this “couple penalty”.

http://www.mercatornet.com/family_edge/view/british_tax_and_benefit_system_favours_single_parents/

Family Issues are Fiscal Issues

Speaking of poverty, my article on the Acton site takes a careful look at the Institute for American Values study on the impact of family fragmentation on the taxpayers. That study looks at how family fragmentation affects poverty, and after that, asks how dealing with the poverty costs the federal and state level taxpayers.

It's About Time...

It's about time somebody thought of correcting the huge marriage penalty built into our entitlements programs. Now, David Blankenhorn and Sen Sam Brownback have come up with a simple proposal to end one of the policies that discourages marriage among the lower classes. Here is their summary of the problem:

What if the federal government forced couples to pay 20% of their annual income just to get or stay married? And suppose a couple could avoid this tax if they either got a divorce or never got married in the first place?

Does it sound like good public policy to force a couple earning, say, $60,000 a year to pay $12,000 just for being married?

That's more or less what we demand of millions of low-income Americans who receive government welfare benefits. For most couples on welfare, getting married is among the more expensive decisions they will face as newlyweds, because saying "I do" will reduce the benefits they receive, on average, by 10% to 20% of their total income.

Here is their idea for a solution:

it's time to eliminate the marriage penalty for low-income Americans. Our proposal is simple: Don't make them pay it. We should allow newly married couples to continue to receive all of their benefits for the first three years of marriage, thus mitigating the marriage penalty currently paid by lower-income couples. This adjustment should give newly married couples a sufficient grace period to realize the economic benefits of marriage – and save some money to stabilize their financial situation – before government benefits cease.

They suggest trial programs in several states and cities across the country. Perhaps they already have places in mind. But if not, this looks like a very worthwhile program for churches with an inner city presence to volunteer themselves for. Most Catholic dioceses, for instance, have some poor parishes, as well as better off parishes. Some diocese should volunteer to partner suburban parishes with inner city parishes to offer them the support, information and guidance they need to take advantage of the temporary end of the marriage penalty.

More on Family Issues as Fiscal Issues

see previous post: The Institute for American Values estimates that family fragmentation costs the state of California a minimum of $4.8 billion annually. Here is a story on education budget cuts in California:

Statewide, 14,000 teachers received pink slips in response to Gov. Arnold Schwarzenegger's proposed $4.4 billion reduction in education spending.

Read it and weep.
By the way, Love and Economics is up on Amazon. Both editions: the Collegiate Edition and the Streetfighter Edition.