Tories finally "recognise marriage in the tax system"

As I was explaining recently, the welfare system and the tax system are the same thing, or at least two halves of the same thing (being some sort of redistribution of income), there is no real or fundamental difference between a welfare benefit and a tax break. There is no point in e.g. stopping Winter Fuel payments to wealthier pensioners if the sole purpose is to fund an equal and opposite tax cut for wealthier pensioners.

The Tories got into government muttering something about "recognising marriage in the tax system", which most people understood to mean at least a transferable personal allowance, which would have particularly benefited single-earner couples with little or no investment income (i.e. married couple with young kids), so politically pretty good. Or at least, maybe a married couple's allowance, like they used to have (and which still exists for people born on or before 5 April 1935).

Fair enough, that idea has fallen by the wayside, but what they now propose is pretty much the opposite of what people were expecting:

Child benefit will effectively be withdrawn on a tapering scale for households where one earner has more than £50,000 income; if one earner has more than £60,000 income, it will be lost altogether. This will be done through an increase in income tax rather than by withdrawing the benefit.

1. Yup, they will continue to pay out the benefit to the mother and adjust the husband's PAYE code so that he pays +/- the same amount in extra tax as is paid to her: the bonus is that the marginal rate of tax/NIC on incomes between £50,000 and £60,000 will increase by 17% if you have two children etc.

2. The official reason given for withdrawing Child Benefit was to reduce government spending (heck knows what the real reason was), but as we see (welfare and tax being two sides of one coin), this hasn't actually reduced the "spending' side by one penny; it has actually increased the 'tax side' (although it comes to much the same thing).

3. And how much did they hope this would save? Originally they said that no higher rate taxpayer (or his or her spouse) would receive Child Benefit, which is maybe one-in-ten recipients and that this would save about £1 billion a year (i.e. one-tenth of £11 billion a year total Child Benefit). Now they've raised the threshold and introduced the taper, with all sorts of fraud, error and admin, the saving (i.e. the extra tax raised) will be half that much, £500 million a year or something.

4. Hmmm, let me think. If the government wants to raise another £500 million a year tax from higher earners with children, isn't there a simpler way of going about this, without increasing marginal tax rates on earned income? Maybe have a couple of extra Council Tax bands for higher value homes and do a bit of rebanding or something? Surely, higher earners with children will either live in expensive houses, big houses or both? And if not, I'm sure that some of those single pensioners trapped in fuel poverty in big houses will be happy to swap places with them; the pensioners can cut their Council Tax and fuel bills; the higher earners with children get to live in the bigger houses? Win-win, that sort of thing?