Fiscal Policy & the Family
How the Family Fares in France, Germany & the UK
By Rebecca O’Neil
December 2005
CIVITAS
ISBN: 1903386454 
37 pages, Illustrated, 8 ¼” x 11 ¾”
$14.95 Paper Original
All developed Western European countries contain within their fiscal policies measures to redistribute income to promote equality between rich and poor, and to ‘even out’ the level of income experienced by individuals going through major life-cycle changes. This report integrates taxes and benefits to compare the level of redistribution among family types across a range of incomes in France, Germany and the UK. The different outcomes for the family types considered reflect the different assumptions and goals which lie behind the three countries’ policies.
France is known for its pro-natalist policies and Germany for its pro-marriage policies. However, the UK regime has striven to be explicitly neutral in terms of family policy, and to focus on reducing child poverty by means of income transfers. Lone parenthood is discouraged by the French and German regimes, but not by the British regime. The UK tax credit system favors children who live with a lone parent rather than with both parents.
This results in the perverse situation in which a child, both of whose parents work full-time at minimum wage, experiences a higher standard of living if he or she lives with one parent rather than both. In the case of unemployed couples, British mothers would experience a substantial increase in their standard of living after breaking up. These outcomes point to fundamental differences between the welfare regimes of Germany, France and Britain.
Taxes and social security payments are much higher in France and Germany, but benefits are distributed more evenly across the social spectrum and the link between contributing and receiving is much stronger. In contrast, redistribution in the UK is much more narrowly directed at low wage earners lone parents. Hence, many in the UK regard welfare as a form of enforced charity payable to those who have not contributed their fair share. It is questionable whether increasing the benefit levels for lone parents and low wage earners would decrease the level of stigma associated with welfare.
FAMILIES STUDIED:
One-earner couples with children. Two earner couples. Lone-parent. No earners. Low-earning. High-earning. With young children. With older children. Three or more children. Couples with a baby. Lone parents.
Political Science
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