Calling all candidates: tax justice is gender justice
Date Posted: Monday 2nd December 2019
We need to think about tax in a different way – as a vital source of funding for public services.
This article was originally in the Metro
It wouldn’t be an election without a row about taxes. The manifestos haven’t been published yet, but the media is full of claims about how much Labour’s spending promises will cost taxpayers. In 2017 Theresa May was forced into a U turn after Labour dubbed her plans for funding social care as a ‘dementia tax’. Although May’s plans weren’t a tax at all, the underlying message was the same: tax is bad, and no one wants to pay it.
But at the Women’s Budget Group we think we need to think about tax in a different way – as a vital source of funding for public services like the NHS, schools and care, and for the social security system that any one of us may end up needing.
And this makes tax a women’s issue. Women are more likely to spend time caring for others, whether children, or older or disabled family or friends. In fact women are still four times more likely to leave paid work to do unpaid care work. This means that they earn less, are more likely to be poor and less likely to have wealth in savings or investments. So, women depend more on the public services and social security that tax pays for.
And tax itself is a women’s issue. Because women earn less, they benefit less from tax cuts. More than 7 out of every ten people who gain from a cut to higher rate tax are men, for example. Similarly, as the IFS has pointed out, Boris Johnson’s pledge to cut National Insurance will largely benefit the better off, again mainly men. At the other end of the wealth scale, 43% of people don’t earn enough to even pay income tax (£12,500 or less) and 66% of these people are women.
These women still pay tax – for example in the form of VAT charged on most goods and services we all buy. These sorts of taxes are called ‘regressive’ by economists because poorer people need to spend more of their income on these goods than richer people. In the UK some essential goods such as food and children’s clothes are exempt from VAT, but notoriously sanitary products are not classed as ‘essential’ so VAT is still charged.
The tampon tax is only one example of how the tax system is based around men, and the things they buy rather than women. For example, fuel duty – the tax paid on petrol – is more likely to be paid by men, because they drive bigger cars for longer journeys. Fuel duty has been frozen since 2010., costing people and planet by taking £46bn out of the money available for public services over the last eight years and making it cheaper to drive instead of using public transport. If we take the climate emergency seriously then we need to encourage people to use their cars less, and public transport more. But at the same time as fuel duty has been cut, so has spending on local bus services, which women use more than men.
The tax system also disadvantages women through different tax rates for different types of income. Women who earn enough to pay income tax pay a higher rate of tax than people (mainly men) whose income comes from rent and investments. A wealthy man who makes money from buying and selling property (and it is more likely to be a man) pays lower rates of tax than a woman struggling to pay her rent. A man who lives off inherited investments pays a lower rate of income tax than a woman who earns the same amount from her salary. This is not just unfair, it is bad for the economy.
But articles about tax during an election rarely touch on these issues. Instead all eyes are on the impact of spending promises on ‘tax payers pockets’. The assumption that the taxpayers’ clothes have pockets reveals who this discussion is really about, as any woman who has tried to squeeze her belongings into the miniscule pockets in women’s jeans will tell you.
At this election we need to stop thinking about tax as something to be avoided at all costs, and start to recognise it for what it is, the price we pay for living in a country with decent public services and social security that we all need.