Taxpayer support

[Bob Arctor]

You still don't see it from an employers point of view at all do you? There is NO subsidy whatsoever to an employer. The subsidy is to the employee. So they can have more money.

 

---------- Post added 19-10-2015 at 21:25 ----------

 

here you go...

http://www.rightmove.co.uk/property-to-rent/property-55497008.html

I've saved you £105 already - and you haven't even started negotiating on the rent.

 

I think I'd want to negotiate on those fees first! Bloody hell! I'm not saying that no-one on NMW can't survive without tax credits, but in the example I gave the people who would qualify for tax credits would be someone with children. That is not a living wage for those people, bearing in mind not everyone can get 40 hours a week or even guaranteed hours at all.

 

---------- Post added 19-10-2015 at 21:50 ----------

 

You havent understood it from a macroeconomic point of view. Tax credits distort the market. It benefits employers indirectly in the way I mentioned.

 

Your problem is you can only see it in microeconomic terms and from an employers perspective. I could persevere, but I dont think its worth the effort. Although ive taken the time to try and explain the benefits system and the way it works it doesnt seem to have made an impact on you. I give in.

 

George Osborne agrees with you. He says that for tax credits to reduce wages have to rise. Some employers say that tax credits have to stay the same or they will have to pay more. Seems fairly clear.

[RonJeremy]

You havent understood it from a macroeconomic point of view. Tax credits distort the market. It benefits employers indirectly in the way I mentioned.

 

Your problem is you can only see it in microeconomic terms and from an employers perspective. I could persevere, but I dont think its worth the effort. Although ive taken the time to try and explain the benefits system and the way it works it doesnt seem to have made an impact on you. I give in.

 

But your implication was that it was the employer's fault - that they were underpaying and making more profit at the employee's expense. It is not the case. Thankfully WTCs are on the decline. As an employer - I have very little effect at a macro level and can only work on the micro level.

[Cyclone]

Then perhaps I don't understand it fully if what you are saying is correct. Are you saying that an employer can pay less than NMW and rest assured that the government will pay the balance. So the employer saves on pay?

 

If this is the case then I really am wrong in all that I have said.

 

I think he's just saying that it interferes with the market rate by setting a minimum.

[RonJeremy]

I think he's just saying that it interferes with the market rate by setting a minimum.

 

By setting a minimum what? Minimum wage?

Plenty of government laws interfere in the market.

[Cyclone]

Yes, minimum wage, that's what we were talking about. And it distorts wages, obviously, as the market can no longer determine the lowest value.

[sgtkate]

Then perhaps I don't understand it fully if what you are saying is correct. Are you saying that an employer can pay less than NMW and rest assured that the government will pay the balance. So the employer saves on pay?

 

If this is the case then I really am wrong in all that I have said.

 

I think me and tigger are saying the same thing, that a person is able to take a lower paid job than they would otherwise be able to afford as tax credit top up their wages. If they didn't have the tax credits they wouldn't have been able to afford rent, food etc on that salary so they'd have needed a better paid job. Put lots of people into this situation and wages would need to rise as there would be worker shortage. That's the gist of my argument anyway. So it's not employers doing this, but in a way they are possibly getting a benefit thanks to tax credits.

[999tigger]

I think me and tigger are saying the same thing, that a person is able to take a lower paid job than they would otherwise be able to afford as tax credit top up their wages. If they didn't have the tax credits they wouldn't have been able to afford rent, food etc on that salary so they'd have needed a better paid job. Put lots of people into this situation and wages would need to rise as there would be worker shortage. That's the gist of my argument anyway. So it's not employers doing this, but in a way they are possibly getting a benefit thanks to tax credits.

 

 

 

Yes we are along the same lines. I dont really have an agenda on this its just the arguments are based on poor evidence and poor reasoning, with people switching from one benefit to another and not realising the differences, because they dont understand the benefit system.

 

You are too defensive Ron im not blaming you as an employer, but employers do get an indirect subsidy form tax credits because they distort the labour market. Just becayse you dont get the money direct doesnt mean there isnt an indirect benefit to you, which you would not have without tax cedits.

 

 

Example: Childcare tax credits.

 

Female A could not afford to take up a job without childcare tax credits. The governments ive her those tax credits for being in work. Female A would not be able to take the job at the salary set without the tax credits because it would not cover the childminding and provide enough income for her.

 

The employer benefits because he gets an employee who would otherwise not be in the Labour market. Its a direct result of this woman getting the extra money from government to pay the childcare.

 

If tax credits didnt exist, then that would be a true market. To get that employee then the employer would have to pay enough to make it worthwhile for her, which would mean a higher salary so she could cover her childcare costs. Onviosuly she cna stay unemployed, but assuming she was a good employee, then the pressure on wages would be upwards.

 

Osborne is relying on the fact that once tax credits are cut back then wages will rise. Unfortunately I doubt they will rise fast enough and this will hit the low paid. Ofc the government isnt really too bothered as the low paid arent natural supporters.

[RonJeremy]

1 pt workers doing the hours you say will be entitled to wtc again wages topped up by the taxpayer (more profit for

the business)

2 so you accept that there is saving to the employer in ee and er ni contributions again(more profit for the business)

3 why did you leave out zhc workers its still the same people on these hours again getting wages topped up by the taxpayer(more profit for the business:roll:

The above is why I became quite defensive.

 

Yes we are along the same lines. I dont really have an agenda on this its just the arguments are based on poor evidence and poor reasoning, with people switching from one benefit to another and not realising the differences, because they dont understand the benefit system.

 

You are too defensive Ron im not blaming you as an employer, but employers do get an indirect subsidy form tax credits because they distort the labour market. Just becayse you dont get the money direct doesnt mean there isnt an indirect benefit to you, which you would not have without tax cedits.

 

 

Example: Childcare tax credits.

 

Female A could not afford to take up a job without childcare tax credits. The governments ive her those tax credits for being in work. Female A would not be able to take the job at the salary set without the tax credits because it would not cover the childminding and provide enough income for her.

 

The employer benefits because he gets an employee who would otherwise not be in the Labour market. Its a direct result of this woman getting the extra money from government to pay the childcare.

 

If tax credits didnt exist, then that would be a true market. To get that employee then the employer would have to pay enough to make it worthwhile for her, which would mean a higher salary so she could cover her childcare costs. Onviosuly she cna stay unemployed, but assuming she was a good employee, then the pressure on wages would be upwards.

 

Osborne is relying on the fact that once tax credits are cut back then wages will rise. Unfortunately I doubt they will rise fast enough and this will hit the low paid. Ofc the government isnt really too bothered as the low paid arent natural supporters.

 

I spend much of my time sorting out employees and making sure I'm within the law and able to make a profit, whilst keeping the staff happy, staying put and still keep Mrs Jeremy in shoes. Sorry but it winds me up when people have a go at employers and businesses who, after all support the workers and people like the lady in the OP (remember her, Mrs Prudham) with their taxes.

It can be soul destroying for staff to work hard all day and see people who don't work, reap the benefits.

[taxman]

Shock horror...but I'm with Osborne on this one.

 

Tax credits were a good idea to begin with (but should never have been administered by HMRC, thousands of people taken away from efficient tax collecting and moved into inefficient hand outs and fraud facilitating), they provided a stepping stone from benefits into work. Before tax credits it really didn't pay to do any work because for every £5 you earned the same amount was taken off you.

 

So the principle was sound, a leg up for the poorest paid to get on the job ladder.

 

The reality is people earning £50K plus getting tax credits, Directors of non trading or loss making companies paying themselves NMW but getting massive top ups of tax credits, fraud on a massive scale, collusion between employees and employers to make sure the "16" hours is recorded but the extra 30 isn't.

 

I could go on.

 

If the poorest aren't going to get their tax credits taken away, but those earning £25-30k+ are then I don't see a problem.

 

Tax credits were brought in when UK PLC wanted people to have children, have jobs and employ people but it was ill conceived and when families earning £50k are entitled to them then its gone beyond a joke.

[RonJeremy]

Shock horror...but I'm with Osborne on this one.

 

Tax credits were a good idea to begin with (but should never have been administered by HMRC, thousands of people taken away from efficient tax collecting and moved into inefficient hand outs and fraud facilitating), they provided a stepping stone from benefits into work. Before tax credits it really didn't pay to do any work because for every £5 you earned the same amount was taken off you.

 

So the principle was sound, a leg up for the poorest paid to get on the job ladder.

 

The reality is people earning £50K plus getting tax credits, Directors of non trading or loss making companies paying themselves NMW but getting massive top ups of tax credits, fraud on a massive scale, collusion between employees and employers to make sure the "16" hours is recorded but the extra 30 isn't.

 

I could go on.

 

If the poorest aren't going to get their tax credits taken away, but those earning £25-30k+ are then I don't see a problem.

 

Tax credits were brought in when UK PLC wanted people to have children, have jobs and employ people but it was ill conceived and when families earning £50k are entitled to them then its gone beyond a joke.

 

That's what I thought they were to begin with - an escape from the "poverty trap". But if, as you say the fraud is being facilitated and people earning as much as £50k are getting them, it is truly outrageous.

Good on Osborne for stopping them for these people.