Dual income families pay less tax than those with one breadwinner

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Single income families pay relatively more tax that households with two earners, the government’s macro-economic policy unit CPB said in a new report on Thursday.

Since 2005, the government has gradually been increasing the tax breaks available to dual income families to encourage more women to go out to work, a policy known as phasing out the kitchen sink subsidy.

Last year, a single person earning €50,000 a year lost about 31% of his or her salary to tax. But a dual income couple paid around 26% in tax on their joint equivalent salary. The five percentage point gap between the two will widen to seven by 2030 if government policy remains unchanged, the CPB said.

The current coalition government, with two Christian parties, has pledged to ensure ‘balance’ in the different tax pressure experienced by one and two income households.

‘It is up to politicans to make a choice about this, but you could ask if it is achieving its aim,’ CPB researcher Egbert Jongen, told Radio 1 news.