Secondly, for partners with a single earner, a measure of ‘individual taxation’ can be introduced in the following manner. The basic ideas are:
· Home maintenance produces a product, this product is real income, and income should be taxed. However, part of home maintenance also can be part of subsistence.
· We may allow for a degree of spillover
of income from one partner to the other. This is the public good argument, i.e. that more people can benefit while the cost is constant.
· Not all interaction is just spillover. Part of the interaction concerns an economic transaction. While the single person has to work for his home maintenance, he also buys it from himself. The single earner out partner buys it from the home partner. Revenue from this transaction should be taxable, i.e. on the side of the person that receives the payment.
Let yh stand for the income of the home partner, and yo for the income of the out partner. Let us use the Bentham tax, and apply it individually. Assign virtual income H to parttime home maintenance activities - and we are ignorant about the required hours. Let parttime virtual home maintenance income be part of exemption x = B’ = B + H, with B money subsistence or the net minimum wage on the market. The situation is neutral for a single person, who’s exemption is x = (B + H) while his income is y + H. The couple however is treated as follows:
· The out partner earns on the market y, buys Ho from the home partner, and has spillover
yh of the income of the home partner. Buying something does not add to income however. Income thus is yo = (y +