Assumed £19.00 a week cuts expected in benefits to those that need it the most.

Mr Jack said:
Do you understand that:

(a) The tax credits that are being cut primarily go to people who are working; and (b) that reducing the tax credits means that reward for working over not working is reduced?
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do you understand that the tax credits budget has been increasing dramatically, that plenty of people think it is unsound ideologically for the tax payer to be subsidising wages on behalf of cheap employers and that the minimum wage will rise over time to absorb at least some of the cuts

sure people will lose out short term but it is just a ridiculous situation in the first place that we should be dishing out so much money to people who have jobs anyway

we can increase the reward for working by increasing the minimum wage and that is a much better way of doing it too - especially when you look at say self employed people such as the woman on question time who are under the illusion that running a seemingly unfeasible hobby business at home is fine because they'll get tax credits etc.. too
 
So what happens when minimum wage goes up to the magical £10/hour politicians seem to be spurting out that the moment?

The actual increase is blunted a bit by the fact that you're losing 30% to tax and NI and shops start charging more because they're having to almost double what they pay the low end staff who make up the majority of their workforce. As a result goods cost more so we've got even less money.

I agree that we need to do something to balance the books and there's certainly a lot of people abusing the system - this needs to stop. However giving working families - the very people who voted the government in to power - a good battering on their monthly finances is not the answer.

And saying "it's just a short term loss" does not help. It might be short term as far as the financial world is concerned but for families trying to get by, keep a roof over their heads and have some sort of a half-decent lifestyle any sort of loss isn't acceptable.
 
Cyanide said:
So what happens when minimum wage goes up to the magical £10/hour politicians seem to be spurting out that the moment?

The actual increase is blunted a bit by the fact that you're losing 30% to tax and NI and shops start charging more because they're having to almost double what they pay the low end staff who make up the majority of their workforce. As a result goods cost more so we've got even less money.
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If you're earning £10 an hour you're not going to be paying 30% in tax and NI. Shops won't have to increase that much - I'd suspect we'll see some businesses becoming rather more efficient though.
 
fornowagain said:
Indeed, £4,327 in UK corporate tax for 2014.
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Yeah but they probably didn't earn much ;)

The reason countries don't make companies like that pay large amounts of tax is because they pay huge amounts to staff that do pay taxes. They should pay the going rate in every country but they might decide that certain countries aren't worth the bother and just pull out.

The other side of it is that we want to attract new large businesses to the country which will create jobs and generate more taxes through employment, reduce unemployment and put more money into the economy. Its better to let these companies get away with not paying as much as they should on their profits than it is to be principled and not have them.

As much as people love to suggest the Tories love corporate tax avoidance, they don't. Why didn't labour fix this issue? Why do countries compete on business tax rates and allow this to happen? Its not ignorance of the issue or an unwillingness to do something. They aren't slipping 50's into the back pockets of politicians.
 
fez said:
Yeah but they probably didn't earn much ;)

The reason countries don't make companies like that pay large amounts of tax is because they pay huge amounts to staff that do pay taxes. They should pay the going rate in every country but they might decide that certain countries aren't worth the bother and just pull out.
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Give us an example of when this has happened?

In 2013 Facebook doubled its UK staff to 500 employees, are you really suggestion they pay enough tax and spend enough to offset the party £4000 Facebook paid in Corporation Tax?
 
dowie said:
yes I'm aware of that

so, again - If you're earning £10 an hour you're not going to be paying 30% in tax and NI.

You'll be paying closer to 15%...
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You're paying 32% tax & NI on the increase.

IE - "we're just put minimum wage up by £3.30 an hour!" becomes £2.20/hour.

I didn't say you're paying 30% on the whole lot, but you're still losing over 30% of any increase in minimum wage and that needs to be considered when MP's use the increase as a justification for cutting tax credits.

[edit] not quite ninja enough ;)
 
Eurofighter said:
Taking money off disabled people is well dodgy imho.

Facebook paid hardly any tax I heard.
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Point is, facebook will continue to use their corporate structure to pay as little tax as possible.
Why should the taxpayer then compensate facebook employee's but giving them tax credits.
Far better to make facebook pay their staff a proper wage, so they don't get the tax credits, and then facebook avoiding paying corporate tax are at least paying their staff wages. It is one way to make large companies contribute more. Facebook might not be the best example of this, as their staff might be well paid, but others are not, and it will make a massive difference over time, to the tax payer, and eventually to the employee.
 
Hikari Kisugi said:
Point is, facebook will continue to use their corporate structure to pay as little tax as possible.
Why should the taxpayer then compensate facebook employee's but giving them tax credits.
Far better to make facebook pay their staff a proper wage, so they don't get the tax credits, and then facebook avoiding paying corporate tax are at least paying their staff wages. It is one way to make large companies contribute more. Facebook might not be the best example of this, as their staff might be well paid, but others are not, and it will make a massive difference over time, to the tax payer, and eventually to the employee.
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Given the amount that Facebook is reported to pay its staff they almost definitely won't be entitled to tax credits.
 
Cyanide said:
Given the amount that Facebook is reported to pay its staff they almost definitely won't be entitled to tax credits.
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Indeed but thousands of other companies at the same gubbins will be forced to actually pay their workers rather than have the tax payers do it.
Conceptually it is a good change over time.
 
Hikari Kisugi said:
Conceptually it is a good change over time.
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There's the key. The big concern is that the current government hasn't got the time to gradually introduce cuts - in fact they've got a maximum of 5 years, less considering they won't want to do it in the run-up to an election - so will bring in heavy cuts before the private sector has a chance to increase wage.

You can't suddenly ask companies, no matter how big they are, to increase wages by 50%+ and expect them all to jump and do it on a whim. It'll take a lot of planning, negotiation etc to get it done. And whilst that's happening more and more people will be suffering because of losing tax credits.

Like I've said, I'm not against a reform of the system and a reduction of in-work (and indeed out of work) benefits but it needs to be done very, very carefully and have a long term plan. As it stands a working family on less than average wage seems to be completely forgotten by most polls, interviews and discussions and we're the ones who stand to lose the most.
 
kitch9 said:
Because we can't. Also we don't tax turnover, merely profit.
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Indeed, unless we set a double vat on their sales or similar we can't make extra money out of them.
Double vat would hurt the consumer initially, but might change the companies policy over time, as their sales and therefore profitability will fall.
 
ak22 said:
How about we change the laws so these these company's like Amazon & Apple actually pay tax? They earn billions and pay F all tax.
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Amazon doesn't make much profit, it usually makes a loss - it tends to reinvest and expand.

Apple on the other hand does have a huge pot of cash(like over a hundred billion) sitting offshore, the US is currently trying to figure out a legal way to get a slice of it.
 
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