Sir, - Mr Derek O'Sullivan (September 20th) has a point in drawing attention to the now outdated distinction made in tax law between wives and female cohabitees; but he does not address the root of the problem. I hope that no Minister for Finance would contemplate eliminating one anachronism by reinforcing another.
The married man's higher personal allowance is an original feature of the income tax, a cardinal role of which was that a wife's income (if any) was treated for tax purposes as that of her husband. (Indeed, before the Married Women's Property Act, this was often the position under the general law, and not only for tax purposes.)
The wife has, accordingly, to be regarded as a dependant. The object of the higher allowance was to make more level the playing ground, as regards the initial thresholds for tax liability, between married men and single, who had no such dependants. (Children's allowances were, of course, justified on the same basis.)
Now, in recent times major inroads have been made into the rule aggregating the spouse's incomes, and the reason for granting a higher allowance automatically on marriage has gone. The "married man's" personal allowance, as such, should be abolished.
Its underlying principle is, however, still sound. The proper result can be achieved by extending the scope of the (more recent) dependent relatives' allowance, so that both wives and female, cohabitees could fall within its ambit. Such an allowance would fall to be made in any case where the female partner is actually dependent (having no income of her own) or must be so treated (because the old aggregation rule is applicable).
I am bound to say that it would be a bold, (or should I say, courageous) Minister who would introduce such a reform. If a relief or allowance has been enjoyed for many years, taxpayers seem to regard themselves as having a vested right to it - even if the income tax principle upon which it was founded has vanished.
Mortgage interest relief in respect, of owner occupied, property might, I believe, be cited as another example. Unfortunately, it is difficult to explain why a perceived benefit should, logically, be withdrawn if the public has never understood its function in the structure of the tax system.
Yours, etc.
Catlematrix,
Rathkeale, Co Limerick.