Axe personal allowance and pay everyone £48 a week, says thinktank

[bloodiedathame]

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.

At what point did I say that?

What's the point in arguing a point if you just make stuff up?

All I said was raise the PA. You said 'what about the shortfall'. I gave one example as 'close loopholes in corporation tax'.

 

[Caracus2k]

At what point did I say that?

What's the point in arguing a point if you just make stuff up?

All I said was raise the PA. You said 'what about the shortfall'. I gave one example as 'close loopholes in corporation tax'.

You didn't say that.....


Perhaps because you didn't think through the consequences of your proposal. .?


So what is it?

. ... are you raising the 0% PA for all to well over 15k so that (current) full time national minimum wage earners pay no income tax or will this only apply to thoose earning minimum wage causing the perverse incentive I mentioned not to seek better paid work?

'cutting loopholes' is rather like 'tax the rich more' . a nice platitude for the ill informed but one that's worthless devoid of specifics

 

[Irish_Tom]

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.

research from the largest complete UBI study is finally giving us a glimpse of its effects. Kela, which is the Finnish government body responsible for unemployment benefits, implemented a two-year-long study on basic income in order to examine whether the Finnish social security system was working. What the researchers found was that the income people received made a negligible difference in employment rates, but it did make a difference to people’s wellbeing.

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, you're 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 whereas the current arrangement incentivises the unemployed to take up low paid work as they don't pay income tax on their earnings up to the first threshold.

I agree that this appears to be paving the way for UBI but in this guise, it's totally pointless.

On the subject of the Finland UBI experiment; I appreciate that you're ideologically opposed to UBI and you love to use this experiment as proof that it will fail, but as I pointed out the last time you posted it:

• Those are preliminary results from the first year of a two-year study.
• I'm not sure why that article says this is the largest complete UBI study because a) it's not complete and b) there have been other studies with far more than 2,000 subjects.
• Finland already has a high unemployment rate (7.8% I believe) so it's unlikely that these people would suddenly find work just because of a UBI payment.
• One of the proposed benefits of UBI is that it gives people the freedom to retrain or educate themselves in order to improve their employability — it usually takes longer than a year to complete this training/education.
• As with other studies, the Finland study shows improved health outcomes — the long-term effect of this is, of course, less pressure on healthcare provision. Also, healthier people are usually more reliable so they can hold onto a job once they get one.
• There are currently a number of other larger and longer UBI studies underway, let's wait for the results of these studies before writing off the whole idea.

 

[bloodiedathame]

You didn't say that.....


Perhaps because you didn't think through the consequences of your proposal. .?


So what is it?

. ... are you raising the 0% PA for all to well over 15k so that (current) full time national minimum wage earners pay no income tax or will this only apply to thoose earning minimum wage causing the perverse incentive I mentioned not to seek better paid work?

'cutting loopholes' is rather like 'tax the rich more' . a nice platitude for the ill informed but one that's worthless devoid of specifics

I'd look at raising the PA for everyone. Of course, it's just an idea, completely pointless getting worked up about it without knowing what shortfall that would produce, and how rates would be adjusted to manage. Incentives are often based on opinion, it's a separate argument, but I appreciate it's an important one. Not one I'm getting into though.

'Closing loopholes' is paying your fair share.

 

[Caracus2k]

I appreciate that you're ideologically opposed to UBI and you love to use this experiment as proof that it will fail

I'm opposed to UBI because I simply don't think it will work at any useful amount of benefit based on running the numbers..

Proposing any meaningful level of UBI whilst retaining any other benefits to a significant degree is total fantasy...

There are over 41 million people of working age (16 - 64) in the UK according to 2016 ONS figures ....

10k per adult equates to 410 billion pounds per year....

For reference the total estimated tax take for 2018 for both local and national goverment is £744 billion.....

This has to also pay for pensions (156bn), emergency services, armed forces (45bn), education (87bn) the NHS (144bn) etc.... Etc.....

(figures in brackets are 2017 figures with total spending standing at 780 billion)

Socialists who claim UBI could be paid for by simply taxing the 'rich' more are trying to deluded you. Generating a new goverment payment liability that would account for over 50% of the total current tax take would require massive increases in taxation that would simply drive away thoose rich or skilled enough to avoid them pushing the massive tax liabilities down to more regular folk.

I'm happy for there to be more study into its feasibility and happy to be proven wrong but the underlying problems are in my view unlikely to be overcome.

 

[Psycho Sonny]

https://www.msn.com/en-gb/news/ukne...eek-says-thinktank/ar-BBUC4m4?ocid=spartandhp



Guys what do you think of this ?

Good or Bad idea ?

more thought needed.

if i'm over 18 and on a zero hours contract or contracted to work 8 hours per week at minimum wage do i also get the free £48?

seems to benefit those that already play the system. so instead of signing onto the dole. they can now just work 1 day per week and get their day's wage and a free £48 on top. meaning they are now far better off and still playing the system for free money.

 

[Caracus2k]

To put thoose figures in context of this proposed measure ONS data shows the employment rate for 16-64 year olds is around 75% currently.

So around around 10.25 MILLION people who are not working but who are of working age would revive £2,500 annually under these plans (and that's ignoring pensioners).

So that's a trivial extra £25,062,500,000 to find.

I. E £25 billion per annun not including pensioners.

 

[robfosters]

To put thoose figures in context of this proposed measure ONS data shows the employment rate for 16-64 year olds is around 75% currently.

So around around 10.25 MILLION people who are not working but who are of working age would revive £2,500 annually under these plans (and that's ignoring pensioners).

So that's a trivial extra £25,062,500,000 to find.

I. E £25 billion per annun not including pensioners.

These people have also seen their benefits frozen for 3 years as well, while prices continue to go up. Somethings got to give somewhere soon.

 

[h4rm0ny]

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

But they'd lose the tax free portion of their income which is equivalent to the £48 per week (more or less). So they wouldn't be better off. The only people better off are those who do not work, no?

 

[robfosters]

But they'd lose the tax free portion of their income which is equivalent to the £48 per week (more or less). So they wouldn't be better off. The only people better off are those who do not work, no?

Kind of what it seems like to me. Anyone over £37.5k loses, People earning under that stay the same and people who don’t work gain £200 a month extra. Sounds like typical Labour.

It does sound like it would help to lift some people out of poverty though.

 

[No1newts]

So am I correct in thinking that you will be £2.5k better off but if you earn over 37.5k you are then paying 40% tax so losing 20p (additional) of every pound north of 37.5k with the 40% band reducing. So essentially when you hit the 50k mark that point onward you are then worse off £200p/a for every 1k you earn.

May have had a math fail but think the above is right?

 

[h4rm0ny]

Kind of what it seems like to me. Anyone over £37.5k loses, People earning under that stay the same and people who don’t work gain £200 a week extra. Sounds like typical Labour.

Create a society that lives off the State, and you can have as many votes as you like. Witness the Democrat party in the USA.

 

[Pudney]

So am I correct in thinking that you will be £2.5k better off but if you earn over 37.5k you are then paying 40% tax so losing 20p (additional) of every pound north of 37.5k with the 40% band reducing. So essentially when you hit the 50k mark that point onward you are then worse off £200p/a for every 1k you earn.

May have had a math fail but think the above is right?

Not quite. Under the proposals the higher rate kicks in at £37.5k not £50k so the £200 cost for every £1k starts at £37.5k.

 

[No1newts]

Not quite. Under the proposals the higher rate kicks in at £37.5k not £50k so the £200 cost for every £1k starts at £37.5k.

Yip but the additional 20% between 37.5-50k equates to around a 2.5k cost which is off set by the 2.5k giveaway so in theory it's only when you hit 50k that you start feeling more pain?

Or in principle is there any difference at all because the benefit/negative almost net off between the 37.5-50k range and then after that you would be paying 40% anyway.

 

[Pudney]

Yip but the additional 20% between 37.5-50k equates to around a 2.5k cost which is off set by the 2.5k giveaway so in theory it's only when you hit 50k that you start feeling more pain?

Or in principle is there any difference at all because the benefit/negative almost net off between the 37.5-50k range and then after that you would be paying 40% anyway.

It's not an additional 20% between £37.5k and £50k. It's an additional 40%. Someone else posted it earlier in the thread, but:

Old:
£0 - £12.5k @ 0%
£12.5k - £50k @ 20%
£50k+ @ 40% (ignoring £150k because I'm lazy)

New:
£0 - £37.5k @ 20%
£37.5k+ @ 40%

So if we take a £100k salary as an example there's an additional £12.5k being taxed at 40%.

 

[Hagar]

To put thoose figures in context of this proposed measure ONS data shows the employment rate for 16-64 year olds is around 75% currently.

So around around 10.25 MILLION people who are not working but who are of working age would revive £2,500 annually under these plans (and that's ignoring pensioners).

So that's a trivial extra £25,062,500,000 to find.

I. E £25 billion per annun not including pensioners.

Good for non working spouses in well off families too who have an NI number but do not pay tax.

 

[Caracus2k]

Yip but the additional 20% between 37.5-50k equates to around a 2.5k cost which is off set by the 2.5k giveaway so in theory it's only when you hit 50k that you start feeling more pain?

Or in principle is there any difference at all because the benefit/negative almost net off between the 37.5-50k range and then after that you would be paying 40% anyway.

Thoose people aren't getting the 2.5k as anyone earning over £12,500 is paying tax on this amount at 20% tax on it rather then getting a 0% tax allowance up to that amount so they are paying the same in tax on the first £12,500 as this measure gives them.

So basically

Non earners or people who earn below £12,500 gain.

Anyone earning over £12,500 but below £37,500 is the same and anyone over £37,500 loses as the higher rate band has dropped down to £37,500 from £50,000

 

[Caracus2k]

Good for non working spouses in well off families too who have an NI number but do not pay tax.

That is one group who would benefit yes.

An extra £200 or so per month non means assessed and not taxed.

 

[No1newts]

It's not an additional 20% between £37.5k and £50k. It's an additional 40%. Someone else posted it earlier in the thread, but:

Old:
£0 - £12.5k @ 0%
£12.5k - £50k @ 20%
£50k+ @ 40% (ignoring £150k because I'm lazy)

New:
£0 - £37.5k @ 20%
£37.5k+ @ 40%

So if we take a £100k salary as an example there's an additional £12.5k being taxed at 40%.

Yip I understand now. So as usual middle earners are shafted.

Hopefully this will be kicked into the long grass.

 

[Caracus2k]

So if we take a £100k salary as an example there's an additional £12.5k being taxed at 40%.

I think it more illustrative to say anyone earning 50k will now be paying an additional 40% on 12.5k or an extra £5,000 £2,500 per year! (forgot to account for the 2.5k paid back)

As the person earning 100k is also losing £2.5k per annun the effect on their salary proportionally is less.

50k isn't actually an unusual salary for jobs in places like London with a lot of police officers, senior nurses etc earning around this amount.

So a couple earning 50k each will be £5,000 per annum worse off and one with one party earning 50k and the other not in work will have 2.5k less than before. The same