Senior Tories called for a tax overhaul to make the system fairer for families after research found they can lose out by thousands of pounds.
Single income parents are worse off than counterparts in France, Germany or the United States, the study found.
Couples with one earner on £60,000 and two children pay £7,000 more than if they were both earning £30,000, the report by the Conservative Growth Group said.
Chairman Ranil Jayawardena, a Conservative former Cabinet minister, said: “Families should be free to keep more of their money and spend it however they want. They earned it and they should keep it.
“That’s why we need to reform income tax to make it family friendly. Married couples and civil partners should have fully transferable income tax allowances, which would particularly help working-age parents with children, at often the most challenging time in a family’s finances.
“Let’s celebrate, not penalise, people who are trying to do the right thing.
“It is right to work towards abolishing inheritance tax too. It’s a death tax. It’s also a double tax, because it’s a tax on money which has already been taxed, and is an anti-family policy that places a significant administrative burden at times of great personal stress. It’s not fair, it’s not Conservative and it needs to go.”
The group wants the government to turn the marriage allowance, which allows £1,260 of a person’s income tax personal allowance to be transferred to their spouse, into a fully transferable personal allowance for parents.
That would mean 100 percent of unused personal allowance was handed over rather than just ten percent. It would cost £3.6 billion but reduce poverty by 4.3 percent, with poorer families getting the greatest benefit, according to the report.
One in ten households would see their net income rise by more than five percent.
The group, which published the report with the Centre for Policy Studies, also underlines its calls for the inheritance tax threshold to be raised to £1 million.
Tom Clougherty, CPS Research Director, said: “Some of the greatest injustices in the tax and benefit system come from the way we treat families, especially those in which one person earns more than the other.
“Even at modest household incomes, one-earner families can end up paying thousands of pounds more tax than dual-earner ones. Making the tax system fairer towards families – particularly those with young children – ought to be a priority for a Conservative government.
“We could make a lot of progress quickly by expanding the marriage allowance and reforming the child benefit tax charge. But there’s a longer term agenda here too – one that points towards a complete overhaul and simplification of the way we support families and children through the tax and benefit system.”
