Government’s tax policy is ‘damaging family life’, warns CARE
In a 75-page analysis, the organisation raises concerns over the tax burden on families where one parent stays at home to look after the children.
The tax burden on such families stands at around 39% higher than that on comparable families in the other 33 countries in the OECD, but CARE says this figure will soar to 50% in the next two years.
The organisation puts the increase down to changes to the tax system introduced by the Coalition, including its decision to lower the higher rate threshold and scrap child benefit for families where one parent earns more than £42,000 a year.
While the tax system protects the poorest, it said the changes would disproportionately hit married couples on modest incomes.
Married couples with only one earner and two children earning just over £42,000 can expect to see a 25 per cent increase in their tax burden as a result of the withdrawal of universal child benefit, while the tax burden of single people with dependents on the same age will see little change.
CARE Chief Executive Nola Leach criticised Government policy.
“The treatment of married couples on modest and average incomes in the tax system remains unfair and out of line with the rest of the OECD," she said.
“This failing is damaging family life, trapping children in poverty and hitting those on middle incomes the hardest.”
The charity welcomed universal credit welfare reforms introduced by Work and Pensions Secretary Iain Duncan Smith to reduce the penalty for couples on lower incomes.
However, Ms Leach called upon the Chancellor to recognise marriage in the tax system when the next Budget is announced on March 23.
She said: “We welcome the protection of those at the very bottom of the income scale, but believe that those in the middle who are not rich are shouldering a heavy burden.”