News from Labour Matters

FT economics editor: Cameron’s marriage tax break is “nuts”

The Financial Times’ economics editor, Chris Giles, has used his blog to launch a devastating critique of David Cameron’s marriage tax break plan, saying that he thinks the policy is “nuts”:

“Misunderstanding history. It wasn’t nutty progressives who got rid of the married man’s allowance and undermined the married couples’ allowance in the tax system. It was a combination of those awful lefties (Nigel Lawson, John Major, Norman Lamont and Kenneth Clarke) who were Conservative chancellors between 1983 and 1997. Gordon Brown took the last bit of the married couples allowance and called it the children’s tax allowance in 2001. It now has a new and horrible name: ‘the family element of the child tax credit’ and it is assessed on joint family income.”

“Income distribution. The beneficiaries of transferable tax allowances are single-earner couples who tend to be at the upper end of the income distribution. The policy is therefore a straight-forward redistribution from poor to rich. There is nothing inherently wrong with this – it is a political choice – but anyone proposing such redistribution must be honest about the consequences.”

Read the full article.

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