asked the Minister for Finance the estimated cost in a full tax year of granting the double tax band to all single parents with dependent children.
Written Answers. - Estimated Cost of Tax Band Change.
54.
Assuming the enactment of this year's budget proposals the nominal full year cost, estimated by reference to the income tax year 1988-89, arising from the change specifically referred to in the question is £2.7 million. The granting of such a concession could, however, have substantial consequences for the taxation of married couples with children where both spouses have income and where their combined marginal tax rate is in excess of 35 per cent. Such married couples would be entitled to elect to be taxed as single persons under section 193 of the Income Tax Act, 1967, and there could be a constitutional obligation to allow them the same benefits as would be enjoyed by two single parents. In those circumstances the true cost of the change would be about £26 million in a full year.