[zeroonetwothree]

Taxing as individuals is kind of unfair to single earner households, since the earner has to support more people it seems reasonable to tax them less. You could maybe accomplish a similar thing with deductions but there will still be some weird cases

[graemep]

We have exactly this problem in the UK.

A couple each home earns x, each gets taxed on x. Each gets the tax free allowance on the fist £12.5k of the annual income. Each gets the full basic rate slice before they hit higher bands etc.

If one of the couple earns 2x and the other zero, then only one can use their tax free allowance and they get one slice of the basic rate band etc.

They still have the same pre-tax income for the same household.

Personally I think people should be allowed to opt in to sharing taxable income.

[jamespo]

This discourages people joining the workforce and is open to fraud. You will then get the argument of "why should I be taxed more because I'm single"?

[graemep]

Why do we need to push people into the workforce? There are a lot of social benefits to people being stay at home parents (which will be the commonest reason for doing so).

What fraud?

> You will then get the argument of "why should I be taxed more because I'm single"?

You might, but its a dishonest argument. You are taxing households together. You are giving each individual the same amount of tax free income and the same amount in the lower bands.

It is already possible for self employed people to do this by making their spouses a partner or shareholder in the business or similar. This is just extending the same rights to employed people.

[jamespo]

Why is taxing households together the correct thing, other than the fact it presumably would improve your personal standard of living (it would also improve mine)? What are you trying to encourage? I could see if you want to encourage families having tax benefits based on children - but universal childcare provision seems more likely to succeed.

And as for not seeing how a tax cut based on 2 people living together could not be abused, you must be very short sighted.

[triceratops]

> Why is taxing households together the correct thing

Hypothetically if the household splits up due to a divorce its assets are divided 50:50 (this varies by jurisdiction). Usually (again depending on the jurisdiction) the lower-earning spouse also gets alimony to even up the difference in income resulting from the new situation, at least for a few years.

Clearly then the state believes assets owned and income earned by either one of the couple belong equally to both (something I agree with personally: it's called a partnership). If that's the case, how could it be wrong to tax the household as a single entity?

[jltsiren]

The fundamental question is whether the primary unit of the society is a household or an individual. If you assume that the society consists of individuals, people should be taxed individually, spouses should be allowed to choose in advance how their assets would be divided in a divorce, and alimony should only be paid to support underage children.

[graemep]

> Why is taxing households together the correct thing

its fairer

> It presumably would improve your personal standard of living

I am divorced and remain single so it would make no difference to me

> could see if you want to encourage families having tax benefits based on children

I want people to enjoy family life. Its the same reason I want family friendly working hours, decent paternity leave, a right to home educate and better schools etc.

> And as for not seeing how a tax cut based on 2 people living together could not be abused, you must be very short sighted.

And as for not seeing how a tax cut based on 2 people living together could not be abused, you must be very short sighted.

Please do explain . Also please find evidence it is abused where tax does work like that. Its not a cut either as many households would pay the same tax, and its likely rates would go up slightly to make it revenue neutral. Its also more consistent as benefits are based on household income in the UK, as are things like student loans and educational bursaries and the treatment of finances in divorce.

[jamespo]

"It's fairer" is just tautology.

Student loans are not based on household income and many other benefits aren't either.

As for family life that is covered by basing tax cuts / benefits on children not merely the nebulous concept of a household.

[scotty79]

> What are you trying to encourage?

Specialization within the houshold? Because it's conducive to reproduction?

[toast0]

As a mostly single earner in a community property state, my spouse earns half the income for tax purposes. If you were going to tax individuals, it's probably reasonable to apply income evenly across marriages for all states.

[mikepurvis]

I supported a non-earning spouse for a decade in Canada and it's always been a bit murky. Like in 2014-2015 there was a concept of transferring up to 50k of income to the spouse ("Family Tax Cut"), but Trudeau's Liberal gov't canceled it when they came into power; I think they correctly recognized that it was basically a handout to families privileged enough to be in a position where there was enough spread between the two earners that transferring that sum would be significant.

CRA is even pretty careful about letting a spouse claim capital gains income; it's always attributed back to whoever earned the original principal (outside of inheritance). I think the only way around this is to formally "loan" the spouse their investment money, but you have to charge them interest and the interest is of course income to you.