What it is with Tories and marriage? Why do they think it is so very important to ‘recognise it in the tax system’?* Fraser Nelson is beside himself - not a nice place to be – about Cameron ‘cowering’ in the face of Labour attacks on this policy.
But for all the supposed dodginess of that dossier, its point about the distributional consequence of Tory plans for sharing tax allowances between married couples is blindingly true, and important. We have very little money to give away. Darling wants it to go to debt reduction**; Brown to mitigating spending cuts (see FT story). Subsidies to the already rich should be even lower in the list of priorities.
Can it really encourage marriage? If merging tax thresholds motivated wedding proposals, you’d wonder what sort of marriage would result. So the tax is all ‘deadweight’ cost. A straight transfer to a favoured, wealthy consitutency. The sort of thing that gives Tories a bad name. In a sense, it answers the FT’s point about Cameron needing to give reasons to vote Conservative, which are evaporating in the face of similarly evaporating pledges on this and that. Here is one: if you are selfish, already well-off, have little need for public services, and like tax cuts, then you will have plenty of reasons to vote Tory.
John Redwood at least sees (some) sense, saying that tax cuts should instead go on matters related to economic production.
UPDATE: The essential figures on this question can be found on LeftFootForward. It also quotes Tim Horton saying: “When we last had a married couples allowance under the Tories during the 1980s and 1990s there was actually a drop off in marriage.” A very good point.
UPDATE 2: And Chris Giles’ piece in the FT is even better. Amongst about 10 brilliant points, “This is pure conjecture, but I don’t think the elasticity of marriage to a tax break is likely to be very high” is the most cutting.
UPDATE 3: A last one. Liberal Bureaucracy explain what Tory tax plans imply about their moral judgments on to your life choices
*Of course, the law used to recognise marriage in other ways that (very) old-style Conservatives would have approved of: by stripping some property rights from women, banning them from certain professions, and so on. I read Mrs Warren’s Profession over the break, with its theme of women being forced into, ahem, unsavoury jobs because of a lack of alternatives. It seems that the institutions of the time left (in the words of GBS):
“a Labor market is infested with subsidized wives and daughters willing to work for pocket money on which no independent solitary woman or widow can possibly subsist. The effect is to make marriage compulsory as a woman’s profession: she has to take anything she can get in the way of a husband rather than face penury as a single woman”
I would worry about any attempts to make marriage artificially remunerative
** “The chancellor argued on Monday that revenue from stronger-than-expected growth should be used to cut borrowing”. I favoured encoding this idea somewhat in A Balancing Act. No one paid any attention.
Posted by Young and poor among losers of Conservative marriage policy | Left Foot Forward on January 5, 2010 at 4:00 pm
[...] Wilkes also has an excellent piece on his Freethinking Economist blog outlining why the Tories are “on the back foot on marriage” Share | Permalink | [...]
Posted by Extra Reading « Bad Conscience on January 5, 2010 at 11:14 pm
[...] (h/t to FreeThinkEcon) [...]
Posted by Alex on January 6, 2010 at 12:53 pm
Just posted this on Giles’ piece:
“For me, this policy on marriage is a really bad one, and these are the reasons I had before I
read your piece (which made the proposal seem even worse):
1. The research (according to the Conservatives) supposedly shows that children who’s parents
stay married are more likely to do better in life, have less behavioural problems etc. As you
rightly point out, unfortunately, the Conservatives probably have correlation, but not
causation, and in fact have the causality backwards. What the research shows, is that people
who get and stay married are more likely to be in a stable relationship (a selection bias), and
thus they are more likely to bring up children better. Basically, that your parents are married
is irrelevant. It’s whether or not they’re in a good, stable relationship that matters for the
welfare of the child. There’s nothing inherently stable about marriage in and of itself
compared to non-marriage. It’s stability that breeds marriage. Not marriage that breeds
stability. So that’s Bad Science.
2. From 1, we can then get unintended consequences. Give people a financial incentive (though
see 3) to stay married, and maybe couples who shouldn’t stay together do so, which wouldn’t be
good for the child. Sometimes divorce is actually in the child’s best interests.
3. Of course, will this actually have any effect at all? I’m skeptical that there many people
who respond to financial incentives in relationships this way. (Though I’m fairly sure I know
why Cameron thinks it’ll work: I believe Nudge by Richard Thaler was on the Conservative summer
reading list a year or two ago. But behavioural economics is still in its infancy, and it’s
even sillier to try to apply it to a situation, without thorough research, that it’s probably
not been used before – marriage) And I’m also skeptical that it’s money that is the main cause
of divorce.
4. The policy is unfair. What about all those people (conflict of interest: I am one of them)
that are either single or marriage isn’t for them (yet or ever)? Not only do single people not
find love, but they also pay more taxes! Do the Conservatives really want to tax the recently
widowed more because they’re no longer married?
5. You touched on this, but I want to stress this point: it’s utterly fake. The Conservatives
are worried about the rate of divorce in this country, and I can perhaps understand that. But
this proposal is meant to keep people married by giving them a financial incentive. I can see
it now – children up and down the land asking their mother why she loves their father, only to
be told that she doesn’t, they stayed together for tax purposes! How is exactly is that
conducive to a good relationship? How exactly does that honour the institution of marriage?
Where is the dignity in marriage after this proposal is implemented? This is what the term
“sham marriage” is for. What this proposal tells me is that all that matters is pretenses. The
pretense in public that people are in a good relationship, so that what people really think and
feel about each other doesn’t matter in the slightest to the Conservatives. It is the kind of
fakery that allows men to beat their wives behind closed doors, homosexuals to stay in the
closet, and married politicians who preach “Family Values” to be banging the secretary or the
maid. The Conservatives say that Britain is broken and our society needs fixing. Perhaps in
some sense that’s true. But instead of reaching for the superglue, the Conservatives want to
photoshop us together. It’s false.”
Posted by Alex on January 6, 2010 at 12:54 pm
As you can see, that was written in notepad. Apologies for the formatting due to that.
Posted by The only not-confused leader right now is Clegg « Freethinking Economist on January 12, 2010 at 9:22 am
[...] parties are still, clearly, confused about whether to protect their silly promises on things like marriage tax breaks. And now, according to the FT, the Tories are confused about whether they would reverse [...]
Posted by A host of links, mostly about inflation « Freethinking Economist on January 19, 2010 at 10:52 pm
[...] – I think he is one of the best essayists in politics right now. He is as mystified as I am by Conservative Marriage Tax [...]