Axe personal allowance and pay everyone £48 a week, says thinktank
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Soldato
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This!!! 10000% This!!!!
My mrs is on part time living wage and I'm a decent earner
The government needs to send a message that it is GOOD to work hard and progress up the career ladder without being penalised for it. I work damn hard for my money, it's not luck....it's HARD WORK!
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Soldato
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If 37.5k isn't significant pay, then what does my 15k mean?
Soldato
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He's right though. I earn double that and we don't live a life of luxury. No sky tv, no holidays abroad, cheap mortgage, cheap clothes. Everything just gets more and more expensive.
It could mean a whole host of things and depends on your lifestyle and where you live.
I mean I wouldn’t be looking at starting a family on that amount but if I was single and living in a cheap area and my drive wasn’t to earn more then as long as you can get by without a struggle it’s of no concern to others.
Yeah single and living with parents 37.5K goes a looooong way - on the flipside 37.5K wouldn't go far around here with the cost of rent if that was your total household income
Yeah single and living with parents 37.5K goes a looooong way - on the flipside 37.5K wouldn't go far around here with the cost of rent if that was your total household income
Yep, this change would make me a top-earner, so I would be out of pocket, but the cost of living here means my salary isn't really worth the same in other part of the country, pretty sure out new house would cost half what we are paying if it wasn't within the M25 or close to London in general.
It would be a bureaucratic nightmare to change over to this system in a single tax year and that is how it would need to be done. There would be a funding gap to pay the weekly £50 before all tax receipts are collected. We know how universality is working out in the benefits system, multiply by 10 or 20x to give everyone with a national insurance number a universal payment from the treasury. If it does not work, you then have the equal nightmare of a reversal in policy.
Increasing the tax allowance disproportionately in favour of the lower end is still the best method even if the middle and higher earners do benefit as well.
Increasing the tax allowance disproportionately in favour of the lower end is still the best method even if the middle and higher earners do benefit as well.
Right so if the tories want it it suddenly becomes good
Its not the idea but who is proposing it.
You might like the vince cable's idea of a household income tax, instead of personal income tax.
You looking at too simplistically.
You think if you giving everyone £48 a week its money going into a blackhole.
In reality its money spent in the economy, so everyone is better off for it.
You give a poor man £10 he will almost certainly spend it somewhere. You give a millionaire £10 it will sit in his bank account offshore somewhere.
Also I am not sure if the proposal is to exclude it from money needed to live on calculations. So for those on benefits if its not excluded, it would act as a safety net if e.g. sanctioned but would not really topup benefits if they claiming means tested benefits as things like housing benefit would be reduced for it. It would only be extra for those on benefits if the benefits are not means tested such as NI based (work history), if I am right it basically means those out of work, but have NI based benefits would get more income than those who dont have a work history.
So e.g.
£72 a week JSA contribution based not means tested than add the £48 allowance would get £120 a week.
£72 a week JSA income based means tested would get £24 a week plus the allowance as it would be deducted for excess income. Total income £72 a week.
Also there are people too ill to claim JSA but not ill enough to claim ESA and currently get no financial support, this would be a relief for them, so this is a good thing for sure.
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Soldato
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Personal allowance should at least be the full time minimum wage annual salary. I don't see why someone earning minimum wage should have to pay tax.
Do people who aren’t married not work as hard for their money? Why should couples get an advantage over single people on the same income?
It’s not luck, it’s hard work.
How on earth is it common sense?
Basically this is a suggestion to bring in a form on low level UBI.
Fortunately we now actually have some data on the effects of giving people a strings free personal allowance from Finland.
So not a lot of shocks ... Giving people unconditional money made them feel a bit better about themselves (at least if only in the short term) but had no effect on the likely hood of then wanting to take on employment. And of course your still left with the issue of how you finance this state largesse.
Anyone already earning over the lower rate tax threshold but below the higher one would be in exactly the same situation as a result of this measure.
But crucially you have now incentivised a lot of people not to work! As they can get £2,500 for doing nothing and every bit of (declared) work they do after that is taxed where as the current arrangement incentivise the unemployed to take up low paid work as they don't pay income tax on their earnings up to the first threshold.
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This would be very interesting to examine. My initial thoughts on it would be that it would be very pro-family in its effect. I guess a lot of your feelings on this would come down to how you view a couple / marriage.
Why not?
I guess because of the expectation that it is tied to having children which are a social good. One could also say that if someone benefits their communities in other significant ways that this could also offset their taxes.
Of course is one does not view children as a social good then one will not take that view.
Caracus2k I never claimed it would boost employment. I said it would be an overall benefit to the economy you dont measure an economy just on employment rate, and also that report said it also improved their well being as well which is a good thing.
h4rm0ny I dont think it would necessarily be pro family, suppose depends how you look at it. If you got one person on 0k income and one on 20k, it wouldnt be used to count it as 10k average income but still 20k total income so the tax paid would be same, the difference would only be if different people cross different income bands like you do. I dont have much of a view on it, I suppose I would be ok with it, although if it means a loss of tax revenue at a time when the government needs more its a bad thing and would need to be recovered from elsewhere which might see your tax burden go back up anyway. I wouldnt see it as an issue like e.g. as council tax where single people only get a 25% discount and 3+ adults pay no more council tax than 2 adults.
h4rm0ny I dont think it would necessarily be pro family, suppose depends how you look at it. If you got one person on 0k income and one on 20k, it wouldnt be used to count it as 10k average income but still 20k total income so the tax paid would be same, the difference would only be if different people cross different income bands like you do. I dont have much of a view on it, I suppose I would be ok with it, although if it means a loss of tax revenue at a time when the government needs more its a bad thing and would need to be recovered from elsewhere which might see your tax burden go back up anyway. I wouldnt see it as an issue like e.g. as council tax where single people only get a 25% discount and 3+ adults pay no more council tax than 2 adults.
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Please illustrate how the economy would benefit.
Please bear in mind my earlier points about higher taxes for higher earners have a tendency to cause them to move to different tax jurisdictions.
Yes the study showed that giving a select group of people strings free money made them self report feeling better.... Well duh....
But what are the long term effects of incentivising people not to work?
and what are the long term effects of damaging the economy by reducing the net tax take because you keep ratcheting up tax for higher earners?
I already illustrated, feel free to reread my post.
Its basic economics, if you give a poor person money, they will more then likely spend it somewhere, so its funnelled back into the economy. That person may spend it at your business which means its £48 more turnover for you.
Its basically only their money temporarily.
Its the same reason why things like social security carry an economy during a recession. If all of DWP spending were stopped tomorrow it would almost certainly trigger a recession.
Its basic economics, if you give a poor person money, they will more then likely spend it somewhere, so its funnelled back into the economy. That person may spend it at your business which means its £48 more turnover for you.
Its basically only their money temporarily.
Its the same reason why things like social security carry an economy during a recession. If all of DWP spending were stopped tomorrow it would almost certainly trigger a recession.