Personal Taxation, Social Security and Financial Arrangements within Marriage

early stage in Britain, though it is familiar in many other countries. It concerns the proposal to introduce transferable personal allowances to the British taxation system. The second debate may be of historical interest by the time this article is published, but that does not detract from its significance as an example of the way in which 'family' policy has to be considered in the context of intra-family social and economic processes. The article argues that, because of a focus on 'households', 'families' and 'couples', tax and social security policies fail to take account of the position of individuals within these units. The effect can be to reinforce, rather than reduce, inequalities within families. First, the green paper on The Reform of Personal Taxation proposes replacement of the married man's tax allowance and the wife's earned income allowance by a system of fully transferable tax allowances.1 At present married men are allowed to earn up to ?3,655 before paying any tax, while married women and single people have a tax free allowance of ?2,335. For some time it has been recognised that this penalises couples where only the husband is earning, since the wife's tax allowance is effectively wasted if she does not earn. In the proposed system every individual would have the same tax allowance, but married people would be allowed to set their allowances against the income of either partner. If, for example, a wife did not earn, her tax allowance could be added to that of her husband to give him an effective allowance of ?4,670 at present rates. Second, the 1985 green paper on the Reform of Social Security proposed replacing family income supplement with a new benefit called family