Wednesday 24 July 2019

How our tax policy penalises Donna and other parents who'd like to stay at home

Donna Hartnett is sick of having to put her children into childcare everyday. Michael Mac Sweeney/Provision
Donna Hartnett is sick of having to put her children into childcare everyday. Michael Mac Sweeney/Provision

David Quinn

Laura Perrins is an Irish woman who lives in the UK. Last year, she made the headlines in Britain when she tore into British Deputy Prime Minister Nick Clegg over his government's attitude to stay-at-home mothers.

Perrins, who had been working full-time as a lawyer, decided to quit work after having a baby, despite the big financial sacrifice involved. She told Clegg she wanted to know why the Government penalised her family and many other families like hers for the choice to stay at home full-time with a child.

Clegg tried to deny that the Government was doing anything of the kind. But it wouldn't wash because Britain has full tax individualisation, meaning people are taxed completely as individuals and any dependants they may have, including children, are not taken into account.

Perrins struck a chord with huge numbers of people and was an overnight sensation.

Donna Hartnett here in this country has also struck a chord with many people after she wrote a letter to this newspaper making a complaint broadly similar to Perrins's. Why, she wanted to know, have things become so hard for families who want to look after their children at home?

She wrote: "The legacy of Bertie Ahern and Brian Cowen has resulted in our two children being raised in childcare centres like hens ... (while) we work, breaking our necks and our children's hearts trying to keep up with tax after tax, with nothing left by month end".

Her children, she said, "are out of their home every day for longer hours than the average industrial worker".

She is sick of dragging them out of bed at 6.30 every morning. She wants to spend more time at home with them, and if that means some bills don't get paid, it's a risk she's willing to take.

Donna forgot to mention Charlie McCreevy. It was he who introduced tax individualisation back in 1999, which means that one-income married couples typically pay thousands more in tax each year than two-income married couples.

If Donna lived in a country that properly allowed what is called 'income splitting', her husband could split his income between himself and his wife, putting them in a lower tax bracket and therefore giving them a lower tax bill.

But this is absolutely not on the cards, and it's not simply because the economy is in such bad shape. It is also because of a philosophy, and that philosophy wants as many women in the workplace as possible and as few as possible at home with their children.

The other side of that card is, of course, having as many children as possible in childcare because the children have to be looked after by someone, somewhere.

The Government's answer to this, when finances allow, is state-subsidised childcare because that would obviously ease the burden on working couples who often have to pay a lot of money to put their children in creches, unless they're lucky enough to have a willing grandparent close to hand.

But this isn't what Donna Hartnett is seeking in her letter. Her complaint is that she has to drag her children out of bed early in the morning, and that they're not at home until late in the evening, by which time they are tired and cranky and it's almost time for them to go to bed again.

State-subsidised childcare isn't going to solve that problem. The only thing which will solve that problem is being able to spend more time at home with your children. But this is not an option the Government wants you to have, or the EU wants you to have.

For example, last year former EU Commissioner Laszlo Andor described the idea of everyone not being in paid work as a "waste of human capital", and the EU has set every Member State the goal of getting as many women into the workplace as they can. The attitude is extremely market-driven.

The Government should not be favouring women who want to stay at home with their children over those who don't. It should facilitate both choices in so far as it can. It certainly shouldn't pump money into childcare because that would obviously favour one choice over the other.

When finances allow, the Government ought to look to the example of Canada, which is introducing a range of pro-family tax policies and other reforms aimed explicitly at parents with dependent children.

The Canadian government is to increase child benefit payments and is to allow income splitting, which will lower the tax bill on ordinary families where one spouse stays at home with the children.

But even if the finances allow, nothing will happen until there is a change of philosophy towards stay-at-homes parents and the State softens its attitude. towards them. That won't happen until lots of others follow Donna's example and make their voices heard.

Irish Independent

Today's news headlines, directly to your inbox every morning.

Don't Miss