Understanding the relativegenerosity of governmentfinancial support to familieswith children

The principal of horizontal equity can be interpreted as requiring that householdswith the same pre-transfer incomes and the same consumption needs should receivethe same post-transfer incomes. We argue the generosity of government financialsupport to families with children should be analysed with respect to such a baseline.Although not without problems, equivalence scales form an important part of such aprocedure. The comparison of financial support to families with children with acorresponding equivalence scale, both over time and between countries, should give amore accurate picture of generosity than comparisons of cash values alone. Wediscuss potential advantages and drawbacks of such comparisons, illustrating withcomparisons of the US and UK systems. The main drawback is that we can onlyevaluate the generosity of support for children relative to that for adults. With thisrestriction, horizontal equity is more likely to be achieved for couples with 1 childthan for those with 2 children. For some groups, the US is more generous to children(relative to adults) than the UK, but this difference is partly generated by the USsystem being less generous to childless households than the UK. The principal of horizontal equity can be interpreted as requiring that householdswith the same pre-transfer incomes and the same consumption needs should receivethe same post-transfer incomes. We argue the generosity of government financialsupport to families with children should be analysed with respect to such a baseline.Although not without problems, equivalence scales form an important part of such aprocedure. The comparison of financial support to families with children with acorresponding equivalence scale, both over time and between countries, should give amore accurate picture of generosity than comparisons of cash values alone. Wediscuss potential advantages and drawbacks of such comparisons, illustrating withcomparisons of the US and UK systems. The main drawback is that we can onlyevaluate the generosity of support for children relative to that for adults. With thisrestriction, horizontal equity is more likely to be achieved for couples with 1 childthan for those with 2 children. For some groups, the US is more generous to children(relative to adults) than the UK, but this difference is partly generated by the USsystem being less generous to childless households than the UK

How many lone parents are receiving tax credits?

When data on child poverty in 2003/04 were released, the fall in child poverty since 2002/03 was smaller than had been expected. Brewer et al. (2005) identified several reasons that might explain this, one of which was that the Family Resources Survey (FRS) - the data-set from which the Households Below Average Income (HBAI) income series is currently derived - may have been under-recording the number of families receiving tax credits (or the equivalent level of support in out-of-work benefits) and therefore underestimating the incomes of some low-income families with children. Brewer et al. (2006), who analyse what happened to child poverty between 1998/99 and 2004/05, show that estimates of spending on tax credits received by families with children based on the FRS have been getting increasingly inaccurate over time compared with estimates made by HM Revenue & Customs (HMRC), with around £5 billion of spending on tax credits received by families with children going unrecorded by the FRS in 2004/05. However, a detailed comparison of estimates of the number of families with children receiving tax credits (or equivalent in out-of-work benefits) based on the FRS with the equivalent estimates based on the government's administrative data is confounded by the fact that HMRC estimates that the government is paying the child tax credit and the equivalent in out-of-work benefits to more lone parents than official statistics suggest live in the UK

The effect of the working families' tax credit on labour market participation

This Briefing Note compares five recent studies that have examined the labour market impact of the Working Families' Tax Credit and related reforms between 1999 and 2002

Families and Children Strategic Analysis Programme (FACSAP): Childcare use and mothers’ employment: a review of British data sources

In this paper we investigate recent trends in childcare use amongst families in Great Britain, and provide a thorough comparison of the different household survey and administrative datasets. The three datasets in questions are Families and Children Study (FACS), Family Resources Survey (FRS), Labour Force Survey (LFS) and Parents’ Demand for Childcare (PDFC)

Can more revenue be raised by increasing income tax rates for the very rich?

This Briefing Note discusses how much scope there is to raise revenue from the very rich by increasing income tax rates and assesses in detail the amount of revenue that is likely to be raised by the government's proposed reforms. It extends analysis presented in the 2009 IFS Green Budget and updates some calculations in a submission to the Mirrlees Review. It also discusses information recently released by HM Treasury and HM Revenue & Customs concerning their methodology for calculating how much revenue these reforms will raise. The Briefing Note shows that there is considerable uncertainty over the revenue that could be raised from the very rich by increasing income tax rates, both because we cannot be certain about the distribution of incomes above £100,000 and because we cannot be certain how those affected will respond to the tax increase. It goes on to discuss under what conditions the measures in PBR 2008 could yield as much revenue as the Treasury is forecasting

The distributional effect of the 2008 Pre-Budget Report

The Pre-Budget Report given by the Chancellor on 24th November 2008 contained a number of changes to the tax and benefit system to come into effect at various points over the next three years. This briefing note expands on the information provided at a briefing given by IFS researchers on the day after the Pre-Budget Report1. It gives details of the changes to taxes, benefits and tax credits directly affecting households, and the total distributional impact of measures announced in PBR 2008 together with pre-announced changes, by income and expenditure decile and household type, at three points in time – January 2009, April 2009 and April 2011. It also discusses what PBR 2008 does to our impression of all tax and benefit changes under this Government. Finally, it discusses what PBR 08 did for child poverty in 2010/11 and the likely effects of the income tax changes for those earning more than £100,000 a year

Wind-Tunnel Investigation of the Effect of Tab Balance on Tab and Control-Surface Characteristics

An investigation was conducted to furnish data on the effect of tab balance on tab and control-surface characteristics. The airfoil tested had a modified NACA 65(1)-012 contour with a plain flap having a chord equal to 25 percent of the wing chord and with a tab having a chord equal to 25 percent of the flap chord and having several nose shapes and overhang lengths. The results of the investigation indicated that, in general, tab balance affected tab hinge-moment characteristics in much the same manner that flap balance affects flap hinge-moment characteristics. A moderate amount of tab balance did not seem to have any adverse effect on flap hinge-moment characteristics

Poverty and inequality in Britain: 2006

This Commentary provides an update on trends in poverty and inequality in Great Britain, based on the latest official government statistics. It uses the same approach to measuring incomes and poverty in Great Britain as the government employs in its Households Below Average Income (HBAI) publication