The tax increases announced in the Budget yesterday will hit one-income married couples harder than single people, except at low income levels, and also 
will continue the effect of tax individualisation.
A married family with children and one income of €45,000 will pay an additional €1,070 per annum in tax and charges whereas a single person on the same income and no dependents will pay an extra €884.
This is in line with the recently announced four year plan which, if implemented in full, will significantly erode the tax differential between married one income families, and single people. This currently favours married one income couples.
The Budget also continues the policy of tax individualisation which heavily favours two-income married couples over their one-income counterparts.
Under Budget 2011, a one-income married family on €60,000 per annum will pay almost €5,000 extra in tax and charges each year compared a double-income couple where one spouse earns €40,000 pa and the other earns €20,000.
Tax individualisation was heavily attacked when it was introduced by Charlie McCreevy in Budget 2000 but the controversy died down when he introduced a small Home Carers’ Credit for spouses who look after dependents at home. This credit has never been increased.
The three main parties promised to increase it after the last election.
Speaking on behalf of The Iona Institute Breda O’Brien yesterday reacted to the different treatment of one-income married families versus single people.
She asked: “How can this be justified? It is similar to the introduction of tax individualisation ten years ago which caused such uproar. A one-income married couple will have one dependent spouse and almost certainly dependent children as well. So why is the government increasing their tax by more than a single person who is likely to have no dependents?”