Osbornes medicine is working!

[I1L2T3]

The website which seems to be an advocacy organisation for the CI propose a flat rate of 31% tax with no personal allowances. Which is a massive tax cut for high earners and a huge hike for low/middle earners, in order to give people 60 odd quid a week whether they want it or not. It doesn't make any sense.

 

UC will have problems of course but the basic idea is the more claimants earn the less benefit they get until they get to the point they are no longer dependant on handouts and can stand on their own feet. That seems a more sensible system than giving benefits to people on £500K a year.

 

---------- Post added 25-04-2013 at 22:57 ----------

 

 

Well surely that's a good thing. I have a mate who works in HR for a supermarket and she's tearing her hair out over the number of good staff who claim benefits that have very rigid cut off points where under the old system they then lose a lot if they increase their hours towards anything like full time. This should be removed by UC and allow people to maximise their productivity to the point where they don't need benefits.

 

The citizens income would have to be set well above £60 a week. Imagine it was £10,000 a year and the average earning on top of that was £15,000. Tax would be paid at 31% on the £15,000. People on that would pay £4,650 in tax or 18.6% of earnings.

 

Now look at somebody on £150,000 on top of citizens income. They would pay £46,500 in tax or 29% of earnings. Yet they pay the same rate as everybody else.

 

Now here is an even better thing - it's completely fair and at the same time Britain advertises itself as an economy with low rates of taxation even for the wealthy. An attractive place to invest with a super-simple tax system with highly competitive rates. It's business friendly. In a system where everybody pays the same rate there is absolute clarity and reduced incentives for avoidance - why avoid the tax when it is considered to be universally fair.

 

I have to say it's posts on here that got me thinking about a flat tax rate. I wasn't convinced but I am more so now. When I saw the Greens promoting the citizens income I put the two together and the fit seemed perfect.

 

I think it's compelling.

[andygardener]

The citizens income would have to be set well above £60 a week. Imagine it was £10,000 a year and the average earning on top of that was £15,000. Tax would be paid at 31% on the £15,000. People on that would pay £4,650 in tax or 18.6% of earnings.

 

Now look at somebody on £150,000 on top of citizens income. They would pay £46,500 in tax or 29% of earnings. Yet they pay the same rate as everybody else.

 

Now here is an even better thing - it's completely fair and at the same time Britain advertises itself as an economy with low rates of taxation even for the wealthy. An attractive place to invest with a super-simple tax system with highly competitive rates. It's business friendly. In a system where everybody pays the same rate there is absolute clarity and reduced incentives for avoidance - why avoid the tax when it is considered to be universally fair.

 

I have to say it's posts on here that got me thinking about a flat tax rate. I wasn't convinced but I am more so now. When I saw the Greens promoting the citizens income I put the two together and the fit seemed perfect.

 

I think it's compelling.

 

That could potentially work, but that's not what is proposed...the advocacy site was talking about around JSA levels, and then HB for the poor etc etc. Plus CI paid to children so the mega breeders get a big old kerching...just more of what we have now but we're also paying benefits to everyone.

 

Even your version would still give the bone idle £10,000 to subsist on so that's not going to get them off their backsides.

[I1L2T3]

That could potentially work, but that's not what is proposed...the advocacy site was talking about around JSA levels, and then HB for the poor etc etc. Plus CI paid to children so the mega breeders get a big old kerching...just more of what we have now but we're also paying benefits to everyone.

 

Even your version would still give the bone idle £10,000 to subsist on so that's not going to get them off their backsides.

 

I just plucked the £10k figure out the air to counter the point that it isn't the regressive system you were describing. In fact if you think through the maths the actual tax paid would go from zero (for those who chose to subsist on the citizens income) to just shy of whatever the flat rate was for the super rich.

 

So OK, let's imagine the citizens income is £500 a month. High enough to provide a basic lifestyle but low enough to incentivise people to get extra work - remember everybody gets to keep everything they earn minus the tax.

 

The more I think about it the more good points there are. It would be an income for citizens only. Not a UK citizen or do not qualify in some other way, e.g. genuine asylum seeker? Then tough. You don't qualify. Also think about the amount of staff that could be let go from the public sector - no more army of workers overseeing the benefits regime an tax system. Some of those could be diverted to staff a robust border control system and citizen qualification system totally focused on making sure only people who genuinely qualified received the income. A much better use of public funds.

[andygardener]

I just plucked the £10k figure out the air to counter the point that it isn't the regressive system you were describing. In fact if you think through the maths the actual tax paid would go from zero (for those who chose to subsist on the citizens income) to just shy of whatever the flat rate was for the super rich.

 

So OK, let's imagine the citizens income is £500 a month. High enough to provide a basic lifestyle but low enough to incentivise people to get extra work - remember everybody gets to keep everything they earn minus the tax.

 

The more I think about it the more good points there are. It would be an income for citizens only. Not a UK citizen or do not qualify in some other way, e.g. genuine asylum seeker? Then tough. You don't qualify. Also think about the amount of staff that could be let go from the public sector - no more army of workers overseeing the benefits regime an tax system. Some of those could be diverted to staff a robust border control system and citizen qualification system totally focused on making sure only people who genuinely qualified received the income. A much better use of public funds.

 

It's not working for me. Just looks like a way to give the feckless an easy if basic ride without any checks and balances and further incentivise foreigners to come here to do the work the feckless should be forced to do.

 

Not the way forward.

[MrSmith]

Does anyone know what the taper for the UC starts at?

With the system at the moment it's like having a tax rate at 98%

 

After the first £25 you lose 65p for every £1 you earn, I think it should have been closer to 50p for every pound. As it is anyone on minimum wage will be getting about £2 a hour when they work, and depending where the job is they might have to work several hours a day just to pay travel costs.

 

---------- Post added 26-04-2013 at 07:11 ----------

 

I just plucked the £10k figure out the air to counter the point that it isn't the regressive system you were describing. In fact if you think through the maths the actual tax paid would go from zero (for those who chose to subsist on the citizens income) to just shy of whatever the flat rate was for the super rich.

 

So OK, let's imagine the citizens income is £500 a month. High enough to provide a basic lifestyle but low enough to incentivise people to get extra work - remember everybody gets to keep everything they earn minus the tax.

 

The more I think about it the more good points there are. It would be an income for citizens only. Not a UK citizen or do not qualify in some other way, e.g. genuine asylum seeker? Then tough. You don't qualify. Also think about the amount of staff that could be let go from the public sector - no more army of workers overseeing the benefits regime an tax system. Some of those could be diverted to staff a robust border control system and citizen qualification system totally focused on making sure only people who genuinely qualified received the income. A much better use of public funds.

 

Wouldn’t it have to be more complicated than that, housing costs are different throughout the country, people with children will need more than those without. Where is all the money going to come from to fund it if higher rate tax is cut as well as giving the rich this free money, UC looks better in that only the people that need it apply and its very flexible, you claim and then declare income online every month and the amount you receive is adjusted to allow for less work or more work. I agree that UC is going to have some teething problems for several years, one can’t expect to fundamentally change the welfare state with having some problems along the way.

[Vague_Boy]

The Daily Mash gets it spot on once again:

 

Weak GDP figures suggest something really bad may have happened a few years ago

 

The latest set of GDP figures indicate the UK economy may have suffered some sort of cataclysmic event about five years ago.

 

Experts said the 0.3% growth in the first quarter was much lower than would be expected, unless something important had happened, such as an effective collapse of the global banking system.

 

A Treasury spokesman said: “If there was some massive, mind-buggering disaster, then our current stagnation would suggest the economy of 2008 may have been over-reliant on financial services and consumer debt.

LINK

 

 

I particularly liked this bit:

 

But Labour’s shadow chancellor Ed Balls said he has spoken to four people who were alive in early 2008 and none of them are aware of anything bad happening.

 

He added: “I asked Alistair Darling if he knew anything about a ‘catastrophe’ and he said his time as chancellor was very straightforward and he spent a lot of time just ‘people watching’ from a first floor window.

 

“Therefore the only reason growth is so weak is because of things that have happened since 2010. I was alive in 2010 and I remember all of those things very clearly.”

 

[I1L2T3]

After the first £25 you lose 65p for every £1 you earn, I think it should have been closer to 50p for every pound. As it is anyone on minimum wage will be getting about £2 a hour when they work, and depending where the job is they might have to work several hours a day just to pay travel costs.

 

---------- Post added 26-04-2013 at 07:11 ----------

 

 

Wouldn’t it have to be more complicated than that, housing costs are different throughout the country, people with children will need more than those without. Where is all the money going to come from to fund it if higher rate tax is cut as well as giving the rich this free money, UC looks better in that only the people that need it apply and its very flexible, you claim and then declare income online every month and the amount you receive is adjusted to allow for less work or more work. I agree that UC is going to have some teething problems for several years, one can’t expect to fundamentally change the welfare state with having some problems along the way.

 

Housing costs is the problem with it initially. It would need some element of housing benefit on top to get it going. That can be managed further down the line with tough border controls, a stringent qualification system, tight control of the financial sector, a targeted home building strategy and a HB taper to bring costs under control.

 

UC is a mess. There's a high chance it will be ditched. It's in utter chaos

[MrSmith]

The Daily Mash gets it spot on once again:

 

 

LINK

 

 

I particularly liked this bit:

 

 

 

...............

[I1L2T3]

It's not working for me. Just looks like a way to give the feckless an easy if basic ride without any checks and balances and further incentivise foreigners to come here to do the work the feckless should be forced to do.

 

Not the way forward.

 

You didn't read the bit of my post about diverting civil servants currently doing logically pointless work at the DWP and HMRC into enforcing a tough border control system and citizens income qualification regime. People wouldn't come here because it would be very difficult to claim the income. They could only come here to work. That's the beauty of it - it's harder to claim than now.

[andygardener]

You didn't read the bit of my post about diverting civil servants currently doing logically pointless work at the DWP and HMRC into enforcing a tough border control system and citizens income qualification regime. People wouldn't come here because it would be very difficult to claim the income. They could only come here to work. That's the beauty of it - it's harder to claim than now.

 

If there were child and housing to pups it would need all the same checks that are in place now. As for foreigners, we can solve that without citizens income. No recourse to public funds for minimum 10 years and then only on citizenship and that conditional on having worked and paid taxes for 10 years. Sorted and no need to pay benefits to millionaires.