What a brilliant illustration this morning of the massive problem in the tax and benefit system in this country, and Gordon Brown's stupid tax credit system. The News of the World (which some will dismiss out of hand of course) details how a married couple with one child have decided to split up because staying together will see them almost a £1000 worse off each month.
As a couple, they had a joint net income of £1,702 a month. But after the split, Sean now gets £1,184 and Chloe £1,396—making a total of £2,580. That means they are £878 a month in benefits better off leading separate lives.It is well documented that the marginal tax rate for those taking tax credits means that people lose more money the more they work. Effectively the tax and benefit system that Gordon Brown has created actively destroys not just relationships but also social mobility by keeping lower earners on less money.