Why marriage should be recognised in the tax system
Fraser Nelson 10:57amCameron has been fairly bold in entering the debate on marriage, because we don't like do that debate in Britain. Not really - it's private, and we Brits don't like debating private things. Anything which helps marriage can easily be paraphrased as "deploying fiscal incentives to force something which should largely be a private decision". And not by the left, but by our very own Pete Hoskin in the below post. Now, we are a heterodox bunch of baristas here at CoffeeHouse and we do disagree - so here is why I think Pete is wrong. I'd like to have a go offering some of the "convincing answers" he's looking for.
Right now, millions of couples are better off apart under the perverted incentives of the welfare state. The Tories would remove this anomaly. They aren't trying to "force" marriage - and I don't believe that they should even encourage it. But the first step is to stop discouraging it, stop paying people to split up, stop messing with the natural order of society (and by 'natural' I don't exclude gay or lesbian partnerships - I just mean how people would behave if the government were not trying to pay them to do one thing or another). This is not about moralising. This is about the mountain of research that shows that marriage is the most powerful provider of welfare known to man, the first best and cheapest source of health, wealth and education. Amongst the well-off, it is hugely fashionable to rubbish all this and speak anthropologically about "changing family structures". And, hell, I've come this far without a graph, so here's one to show just how they are changing:
The trend since 2004 has gone upwards and if you strip out immigrants (who are far more given to marriage) then most children born in Britain today are born outside wedlock. Only a generation or two ago, this was a taboo - now it's the norm. Now, the main determinant factor in life chances is being brought up in a two-parent family. As Pete says, much of this is about love. But it is also about life chances. Research by YouGov recently showed that children brought up in lone parent families are:-
75% more likely to fail at school
70% more likely to be a drug addict
50% more likely to have an alcohol problem
35% more likely to experience unemployment / welfare dependency
Today's welfare state has for a long time deprived the low-income family of the economic rationale which binds so may familes together (and before you all sniff at that, ask yourselves: how many middle class marriages would survive if the women were guaranteed the husband's income (or more) without his presence? Or how many men would persist in their not-always-interesting jobs if they could get the same amount not working?) The economics of this are relevant in low income families, the very group where the two-parent family makes the most difference.
Marriage is simply the strongest, most successful basis for that two-parent family. One of the IDS research projects found that almost one in two co-habiting couples in Britain split up before their child's first birthday. The same is true for just 1 in 12 married couples. And no, no one - not me, not the Tories - is of course not saying that marriage is always and everywhere the right thing to do: if relationships are abusive, for example, then of course divorce is the option. But for most cases, for most families, marriage is best guarantor of the two-parent family which is far and away the best basis for bringing up children. This is not a moral issue, but a simple social one.
About a year ago, I was sent a letter from a reader of my News of the World column saying that he loved his family but had reluctantly decided the best thing he could do for them was to leave them. He had worked out the maths, and put it in the letter: right enough, the benefits his wife could receive if she were a single mother significantly outstripped what he could provide in earning. This was an absolutely heartbreaking letter, showing the kind of barbaric system we have that is prizing loving families apart.
This is what the Tories want to eradicate. This is not about dangling £20 notes in people's noses, thinking it will lure them down the aisle. This is not, actually, about middle class families for whom the sums of money involved would be an irrelevance. This is about changing the fact that Britain has so many low-income couples who are also faking a divorce, telling the authorities that they are living apart to claim more benefit. Deplorably fraudulent, you might argue, but what kind of debased system do we run in Britain were people are reduced to faking a split-up?
It costs billions upon billions of pounds to pay people to break up. The Tories are simply proposing a system that goes with the grain of human nature - and to stop creating all this expensive poverty which we never were able to afford.
So much of the "broken society" argument comes down to families. Young men who group up without male role models, drifting towards gangs because they find there the authority figure that has been missing from their lives. In America, this debate has mostly been about black families - and much research has been done understanding that promoting marriage is the most efficient form of welfare. In Britain, I fear far more work needs to be done by the Tories, but they do have an excellent case. They just need to spell it out.
UPDATE: Pete responds here.
UPDATE 2: Philip Salter at Adam Smith Institute declares Pete the winner of the efficacy side of the debate saying "£20 per week really won’t make much of a difference." Guys, please click here, look up p17 and p19 and see how much low earners are on in this country - the poorest 10% have disposable income of £87 a week (down from £96 in 2001/02). So £20 a week = £1,040 a year = kids clothes for a year or the family holiday. You'd be amazed how many people there are for whom this does make a difference.
UPDATE 3 (Pete Hoskin): Yes, Fraser, following your UPDATE 2, I agree that £20 a week can make a huge difference to low-income earners. But how many of those would marry to qualify for the Tories' tax break? Surely not all of them either a) are unmarried, or b) have partners lined up already etc. In the end, you can't separate efficacy and morality in this case: a more effective policy, helping more low income earners, would be more moral.
Previous
HJ
July 15th, 2009 11:36am Report this commentFraser - I agree.
However, the solution is not the £20 incentive the Tories propose. It is transferable tax allowances, proper recognition that two people (or a family) cannot survive on the income of one, if one loses their job (the state recognises this for those that aren't married, but not for those that are) and generally levelling the playing field so that the natural economic and other advantages of marriage can prevail.
David
July 15th, 2009 11:41am Report this commentCausation and correlation again. The assumption is that marriage provides a stable relationship. It could of course be that the stable relationship causes marriage, and thus trying to get people to marry won't actually make things better. They could actually make things worse, given the effect of bad marriages on children.
Simon
July 15th, 2009 12:11pm Report this commentWith regards to the so called 'couple penalty', is this not just a consequence of the higher costs people incur living apart rather than together? For example -
2 mortgage payments / rent bills not 1.
2 council tax bills not 1.
2 television licenses not 1.
2 phone line rental / broadband bills not 1.
2 water / gas / electricity bills not 1.
I could go on but as it obviously costs less to live together rather than apart shouldn't governments account for that especially in difficult financialtimes?
Long-term HK
July 15th, 2009 12:30pm Report this commentIn Hong Kong, either spouse's tax allowance is fully available to the other.
The tax authorities work out for you whether your tax would be lower if they assess you jointly or separately, and you pay the lesser amount.
Like so much about the Hong Kong tax system (no tax on dividend or interest income, no capital gains, no tax on earnings from outside of HK) it is a very simple concept and it works well.
Hawkeye
July 15th, 2009 12:39pm Report this commentGood article. I agree wholeheartedly with it, but you might also want to point out a few well known actuarial statistics.
Not all marriages are equal - the younger you marry the higher the risk of divorce. See http://www.divorcerate.org/ for some statistics.
Also the number of marriages increase the likelihood of divorce. Second marriages are more likely to break up, third marriages even more so and fourth marriage are just break-ups waiting to happen.
Ironcially, those who need support via marriage most (those at the bottom of the payscale) usually need that support when younger when a marriage is less likely to survive.
Ray
July 15th, 2009 12:47pm Report this commentThank you, Fraser.
Your eloquent and erudite response is appreciated. I imagine it will be downloaded into a good many Coffeehousers' 'favourites' files for future reference.
Chris lancashire
July 15th, 2009 12:59pm Report this commentExcellent article but slightly illogical. You do a great job proving the benefits of a solid partnership which is buttressed by marriage but then state that the Tories "shouldn't even encourage it". Why not? If you believe that the marriage unit is socially best (as I do) then why not have mild incentives to encourage it?
Verity
July 15th, 2009 1:33pm Report this commentOf course the state should encourage marriage! It is to the benefit of society as a whole.
That is why the socialists have worked so hard at destroying the concept. Look at anything the Gramscis do and it will become immediately apparent that the destruction of our stable society is the engine of this government. People say, Brown/Blair/Harman/Smith whoever, "got it wrong again". But that is not the case. They are malign and know what they are doing. Roll on Big Brother and the One Worlders and Common Purpose.
Mark M
July 15th, 2009 1:35pm Report this commentChris Lancashire
I would say that the tax system shouldn't encourage marriage because it is not (or at least shouldn't be) the role of the government to tell its citizens how to live their lives.
If the tax system encourages marriage you'll get situations where people marry just for the money regardless of how it affects the child, just as the current system encourages divorce.
Once again, Fraser's graph tells quite a story. I imagine if you plot available welfare over the top you'd find a correlation.
Tiberius
July 15th, 2009 1:46pm Report this commentI completely agree with you, Fraser. This is one of those topics where arguing with the data is rather like saying Newton was right about gravity only because he wasn't upside down at the time.
On the graphs, yes, you are becoming a bit of what Kirsty Allsop is to taking out walls.
Pete Hoskin
July 15th, 2009 1:51pm Report this commentTiberius: as this has become a me vs Fraser clash(!), I must stress that I'm not arguing against the data, and I do think that the Tories are right to support marriage in some way. See my latest post (http://is.gd/1zG57).
I suspect this could be an "agree to disgaree" area - but it's certainly provoking some great comments from CoffeeHousers.
Widdershins
July 15th, 2009 2:04pm Report this commentSo what happened in the 80s to cause such a steep rise? Did Maggie do something to make birth outside marriage so common? Or was it a more fundamental shift in social attitudes? If it was the latter (as I suspect)I reckon it will be very hard to reverse: a 20 quid bribe won't do it.
Fraser Nelson
July 15th, 2009 3:18pm Report this commentTiberius, dya think im overdoing it with the graphs? I do like to run them, just because I can and wouldn't get to in a newspaper. But perhaps it can get excessive.
Tiberius
July 15th, 2009 3:47pm Report this commentNo, Fraser, I don't think you're using too many graphs - I'm just having a joke at your expense!
I think any well presented economic argument will include a graph or tabulation of some sort, because it is difficult to communicate the points as effectively in words. Roger Bootle, for example, almost always included a graph in his excellent "Economic Agenda" pieces for the ST.
Th only difficulty (as some posters have already mentioned) is the scale. I have to squint through varifocals sometimes to follow the data.
In general, though, keep them coming. Who knows - if Michael Gove can make the jump from The Times to Education, why can't you follow him and end up Chancellor! Hey, wouldn't that make TGF UKIP's day!
Deborah
July 15th, 2009 5:37pm Report this commentKeep posting the graphs - I like to see the supporting data and when the statistics are stark a picture can really drive the message home.
TGF UKIP
July 15th, 2009 6:24pm Report this commentTiberius, absolutely bang on and what a huge improvement Fraser would be. At least Joe Public would be prepared to listen to him and as we all know from his posts he would have avoided all the stupidities like matching and exceeding Labour spending, "sharing the proceeds of growth" and ringfencing the bottomless pit and "International Development" at the expense of the Armed Forces.
Quite apart from which unless he's been chronically fiddling his exes, he would have the moral authority to speak on such matters unlike that sordid little shit Osborne (on whom I note, Tiberius, you seem to avoid expressing any view - or is it just that any best mate of Dave's is also a tiberian hero?)
Agree about the graphs as well, but isn't all this agreement becoming mutually very unsettling.
Michael Booth
July 15th, 2009 6:36pm Report this commentMark M
If it is not the role of the government to tell people how to live their lives with regard to marriage etc, it is, by a logical extension, not the role of the government/state to provide a financial bail out to support the life decisions they make.
Mark R.
July 15th, 2009 11:42pm Report this commentWiddershins is right; a £20 bribe will not change social behaviour.Frasier is advocating the use of a blunderbuss to hit the wrong target. It is not marriage that needs to be encouraged but responsible behaviour. The man who will walk out on his partner and child in the first year of its life is not going to stay because of half an hour in the Registry Office and a piece of paper. Marriage is an irrelevance. It is the desire for respectability which drives people to marry on the one hand and to behave responsibly on the other. But there are plenty of responsible couples who are not married and don't give a fig for respectability.
The problem to be addressed is the behaviour of people, men and women, who are neither respectable nor responsible.
Tax is not the solution. There are already worthwhile tax breaks for married couples in relation to self-employment, capital gains tax and inheritance tax but only the comfortably off get any benefit.
The logical solution is to reduce or abolish benefits for single people, but that is never going to be a political option.
Annie B
July 17th, 2009 4:31pm Report this commentLike that point Michael Booth - spot of logic lurking there!
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