A tax on both your houses

Most people I know (who I have discussed it with) think that David Cameron's plans to provide tax breaks for married couples are ill-considered and hark back to a bygone era that is better best forgotten. It is surely not equitable for a married couple to pay less tax than a couple who are merely cohabiting.

I would have assumed that the Tories had calculated some numbers on this and judged that it was a vote-winner but I'm afraid I can't give such credit to a party that mistakes 5% of teenage girls getting pregnant with 50%. Modern compassionate conservatism, but still as out of touch as ever.

The other parties, quite rightly, haven't touched this policy with a bargepole but, rather than wash their hands of it, I wonder if there's votes to be gained in taking the policy the other way.

Taxing marriage? Well, not far from it to be honest.

A couple (married or not) earning £40k each and assuming an effective tax rate of 20% will have a combined take home wage of around £5,000 a month.

A single person will take home around £2,500 a month.

Now if you consider the significant expenses a household has on a monthly basis, it generally doesn't make a difference how many people live in the house.

Mortgage costs, rent, electricity, gas, car payments, new bathroom suite, new kitchen appliances etc. Even council tax only has a 25% discount for singles meaning couples effectively save money.

So what am I tentatively proposing? Well, rather than an income tax on individuals, there should perhaps be a tax on households. Perhaps the normal rate of tax could be reduced slightly and the higher rate of tax could move up to start at £60k meaning more tax would be taken from the £5k couple and less from the £2,5k person.

I accept it is potentially an administrative nightmare but the benefits for single parents, divorcees and youngsters trying to get on the property ladder are obvious. More benefits arise from the flexibility couples would have. Only one person working, without having their income clobbered, would mean no need for exorbitant childcare costs, less pressure for state care for the elderly and generally a less stressful family life albeit with 1 car instead of 2 or 1 fewer overseas trip a year (potentially making it a green policy too). There would be a jump in job vacancies too which would save on unemployment benefit.

The Tories want to give married couples an even sweeter deal than they currently enjoy to secure the 'middle England' vote. I reckon, with some imagination and drive, we could shake up the entire system and create a fairer deal for all.