But poor people who work won't be any better of!
All you have done is incentivise people not to work!
Why don't we give the poor a million pounds each to incentise them to spend by your logic?
Axe personal allowance and pay everyone £48 a week, says thinktank
- Thread starter chaparral
- Start date
But poor people who work won't be any better of!
All you have done is incentivise people not to work!
Why don't we give the poor a million pounds each to incentise them to spend by your logic?
Again you looking at it the wrong way, you looking at as if employment is the only important metric.
There is still an incentive to work as you still are better off working, you dont lose the £48 when you working, its given to everyone including the employed.
Economies work by circulation of money.
There is still an incentive to work as you still are better off working, you dont lose the £48 when you working, its given to everyone including the employed.
Economies work by circulation of money.
Because they are provided with services from the state? People are often in favour of higher taxes just above the rate at which they currently own.... Funny thing that?
chrcoluk is talking about a specific micro-effect and I believe they are correct. Put money in a poor person's pocket and they will spend it and that stimulates the economy. I believe the notion of rich people sitting on their money and doing nothing with it is something of a myth, though. It was a big problem in Japan where they are a nation of cautious savers, but generally better off people's money is either invested directly / on their behalf, or sitting in a bank in which case it's an asset that the bank will be investing on its own behalf. Either way, it's still entering the economy. But an advantage with poorer people's spending is that it's entering the local economy more. Which I believe may be their point. In any case, I think they are right about this micro effect.
What you (Caracus) are arguing is about the wider consequences. And that's more complicated and you may well be right that it makes the specific effect chrcoluk refers to not worth it. But I think you are arguing past them as chrcoluk has, so far as I can seen, just listed this as a point in UBI's favour rather than a conclusive argument.
What you (Caracus) are arguing is about the wider consequences. And that's more complicated and you may well be right that it makes the specific effect chrcoluk refers to not worth it. But I think you are arguing past them as chrcoluk has, so far as I can seen, just listed this as a point in UBI's favour rather than a conclusive argument.
Soldato
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I'm not married, the "my Mrs" was a figure of speech.....I don't think I'll ever get married.
You have reduced the incentive to work so less people are likely to work. Theres still *some* incentive to work if income tax rates are 99‰
This proposal will create or increase perverse incentives for people either not to seek any work or to only seek work that they will not declare to the tax office.
Not working is demonstrably bad for people and the ongoing costs of people not taking up low paid work will be catastrophic in the long run.
A lot of people who are higher rate tax payers started out earning very little. By taking on thoose jobs they developed the skills and experience that helped them to progress to better paid job. You have just incentivised people never to take on thoose lower paid jobs potentially affecting the supply of people able to do the better paid jobs!
h4rm0ny Yeah I accept it may still go back into the world economy, so I accept your point of it been local economy vs world economy.
caracus we going to have to agree to disagree, you cannot look past the employment metric, but I will say this, the affect on the economy from the stimulus as h4rm0ny rightfully puts it, is ultimately it increases employment anyway as more jobs could be made available in a stronger economy.
caracus we going to have to agree to disagree, you cannot look past the employment metric, but I will say this, the affect on the economy from the stimulus as h4rm0ny rightfully puts it, is ultimately it increases employment anyway as more jobs could be made available in a stronger economy.
I should supply some context to prevent others adding their own, however. I'm quite nationalist so I don't necessarily mean the above as a criticism of what you say. I'd quite like to see banks or others offer investment portfolios that are focused on British investments. Perhaps there are, but I've never noticed them. Or perhaps what I suggest is simply investing in UK bonds, though I feel something broader is what I'm suggesting.
In any case, I agree with you it is an advantage. I'm not sure I do not agree with Caracus on the wider point though. I'm just trying to head off an issue where people talk past each other. (Futilely, perhaps).
I would actually offer a different counter-argument to the above. How much do local economies still exist? We have pubs. We have occasional local shops. But if we're specifically talking the poorer demographic (and we are), then a lot of that money is going to go straight out of the local economy into national chains that suck up the local money into non-local profits and mass-produced goods bought online or at most through a local intermediary. I'm not saying it's nothing, but there are no more economic walls around local communities. The money goes flying right out of them these days with the main economic activity still persisting locally being infrastructure, the trades and housing / rent. Food, goods, entertainment - all primarily non-local these days. Maybe your recipient might spend some of it on a local plumber to fix up their boiler, but most of it will go on supermarket food or netflix subscriptions.
EDIT: That last sentence is not meant to sound elitest, even though it does sound exactly like "bread and circuses". I just mean it in an observational sense.
I have a child, and pay top rate tax (only just) while living in a high cost of living area, so would love a tax break. And even I don't think you should get a tax break for being married and having kids. I think some reasonable steps to promote a family unit IF you are having kids, but I don't think we need to encourage any more people to have kids. Yes we need more humans to be born to continue the species, but I don't think there's any need right now to incentivise things.
Soldato
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Everyone, earning or not, is provided with services from the state. Try a different argument.
And thoose services have to be paid for by someone.
I'm not against progressive taxation and a low tax free threshold for income tax (like we currently have). But you appear to have failed to explain why people earning below a relatively arbitrary threshold should pay no income tax when a lot of people, who are working full time, would fall within that bracket?
That shortfall would have to be picked up somewhere else and increasing taxation on higher rate taxpayers isn't the universal panacea you might beleive it to be.
Poor people who work would get their wage on top of the £48, they currently lose benefits when they start work, so under this new system there would be more incentive to work rather than less
Are you missing the point that if they are earning over £12, 500 (after the basic rate goes up to this) that the additional tax they pay on that will be the same as the £48 a week the goverment is giving them?
The people benefiting from this will only be people who are not working or (to a lesser degree) people working so little they don't earn over £12,500
So you have incentived people either not to work or at least to work a lot less and not seek better paid employment!
Soldato
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I'd imagine the income tax taken from those earning between current PA and a theoretical minimum wage PA is pretty negligible. Not only are they not contributing much, losing £130 to NI and Tax is a big hit every month. As such the Government could take up that slack very easily in many different ways. Making sure tax loopholes are tightened or closed to corporations for one... that'd close a huge hole, but too many MPs and their spouses would lose out, so it won't happen.
Fail.
Everyone earning above national minimum wage would pay no tax on the proportion of their earnings below minimum wage under your proposals unless you're going to change our current tax system from one where were income tax is applied in bands to one where tax is paid on all of your earnings at one rate based on your total earnings.
So a lot of money lost from people earning above the o% threshold would have to be made up (by people earning above NMW) regardless of whether they earn above minumum wage or not. It's not just the few people earning minimum wage that would be effected.
Alternatively if you level income tax at a set rate on all income based on total income you have a just set up a whole host of perverse incentives including that people on minimum wage will have massively reduced incentives to seek slightly better paid work as they will often end up losing more money in tax then they gain in salary.
Absolute genius!
And it is easy just to suggest taxing conaoines more or 'closing loophole' but guess what happens if you try to do that unilaterally? That's right some of thoose companies will just decide to up sticks and leave the country all together.
Basically your just suggesting raising the 0% tax bracket to well over £15k a year with the usual hand waving about how your going to pay for it... Whilst also reducing NI take aswell
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Soldato
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The problem is before long tax breaks will start getting inserted into the tax code again and of course they will go to the rich. In theory a flat rate might make some sense but in reality it won't happen like that.
Seems bonkers to lower the 40% threshold to £37.5k, they are just about to put it up next month to £50k.
What they really need to look at is the ludicrous decay of personal allowance between £100-125k, which means the marginal tax rate is effectively 60% (way higher than when you pass £150k and get to the 45% rate). Coupled with the fact that childcare vouchers have been abolished to new applicants, and the £100k threshold for the new tax free childcare scheme, there is a massive kick in the teeth once you hit £100k that means you see very little benefit from pushing your income above that level. You also lose 30 hours of free childcare a week. Arguably people who need childcare for 3-4 year olds are actually better off earning £100k than say £102k maybe even as high as £105k, as you end up with less money in your pocket after childcare costs. Not sure if you can use increased pension contributions to avoid this potentially?
What they really need to look at is the ludicrous decay of personal allowance between £100-125k, which means the marginal tax rate is effectively 60% (way higher than when you pass £150k and get to the 45% rate). Coupled with the fact that childcare vouchers have been abolished to new applicants, and the £100k threshold for the new tax free childcare scheme, there is a massive kick in the teeth once you hit £100k that means you see very little benefit from pushing your income above that level. You also lose 30 hours of free childcare a week. Arguably people who need childcare for 3-4 year olds are actually better off earning £100k than say £102k maybe even as high as £105k, as you end up with less money in your pocket after childcare costs. Not sure if you can use increased pension contributions to avoid this potentially?
Associate
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How very cynical! (And very likely)
The proposal is too simplistic in its approach and won't be supported bv anyone who is anything other than a net beneficiary unless the whole end to end benefits system is included for review and adjusted, including pension provision.
In principle and in isolation the concept is the right sort of thinking, just not considered broadly enough to be implemented.
In principle and in isolation the concept is the right sort of thinking, just not considered broadly enough to be implemented.