Universal Credit Scheme!!

[Cyclone]

If it incentivises work, then how could it be also de-incentivising? I don't follow.

[Titanic99]

If it incentivises work, then how could it be also de-incentivising? I don't follow.

 

Quite simple really.

 

Two friends person A and person B

 

Person A currently unemployed, person B works full time.

 

Person A gets £200 a week in total Benefits and Person B works full time gets £250 per week.

 

Universal credit is introduced and guarantees person A £250 if he takes a job that pays £200 per week.

 

Then why shouldn't person B drop his hours to the level that pays £200 and claim the £50 Universal Credit, resulting in a loss to the taxpayer.

[Cyclone]

As I've understood it there will be no point at which working more does not increase someones earnings.

 

So in the example you give above either person B will be able to claim a small amount under the new system and take home £270, or person A will not be raised up to the £250 level, but instead to £225 (obviously we're just making numbers up, but they serve to illustrate the point).

 

The point isn't to simply incentivise working full stop, it's to incentivise earning more at every stage, there is never a point where earning an extra pound will cost you a pound in having a benefit withdrawn, the marginal tax rate will always be <100% at every stage.

[chem1st]

Do the Maths - the proposed EMTR is 65%, although it might now be 74%, and could even be higher what with NEST.

 

£50 difference in earned income via labour should lead to one being better off by £17.50, £13 or maybe even less.

[Cyclone]

It's an improvement on the current EMTR of >100% isn't it.

[chem1st]

It's an improvement on the current EMTR of >100% isn't it.

 

Yes, in much the same way that being raped once is not as bad as being raped twice.

 

Top EMTR should be no higher than the top rate of tax.

 

Citizens have a duty to avoid paying tax and to support the black market in the current economy as it is so ****** up.

 

They shouldn't be taxing wage labour anyhow, they should be taxing unearned income, especially in the form of rents, they should be taxing land values.

[Cyclone]

There's no pleasing you, or at least not until a LVT exists and you get what you believe you're entitled to.

[Ms Macbeth]

Do the Maths - the proposed EMTR is 65%, although it might now be 74%, and could even be higher what with NEST.

 

£50 difference in earned income via labour should lead to one being better off by £17.50, £13 or maybe even less.

 

If you must use acronyms, please explain to the uninitiated what they mean. Thanks.

[Cyclone]

Effective Marginal Tax Rate, the amount that gets removed in total (including any tax, ni and most importantly the stoppage of benefits).

 

At the moment due to the stoppage of benefits the EMTR can be >100%, so earning more reduces someones total income, clearly a disincentive to work, the universal credit scheme is designed to ensure that earning more always results in taking home more money in total.

Chemist isn't happy with that, it's not radical enough for him.

[chem1st]

There's no pleasing you, or at least not until a LVT exists and you get what you believe you're entitled to.

 

It is a step in the right direction. I argue for LVT as it is a fair tax, a much fairer tax than income tax. Ideally income tax upon wage labour would be abolished altogether. What I believe EVERYBODY is entitled to, is the fruits of their own labour.

 

At the end of the day, the 50% tax rate is being lowered to 45 and then to 40%, because a 50% tax rate supposedly is a disincentive to work.

 

If that is true, then the maximum EMTR should never be higher than 40%.

 

The reason I want and LVT is to make the whole of society better off. At the end of the day, I am doing alright in the current system. Must admit though, it has took a while to game it.

 

That is to say, much of my recent economic activity has been gaming the system - rather than doing productive work. Seeing as the system doesn't reward hard work, to work hard would be irrational. Having done some hard graft and not been any better off for it I soon realised honest hard work was a mugs game, that is a disgrace upon our society.

 

Hard work should be rewarded. Sadly it isn't.