Savings Gateway

1echidna

loaner wrote: »

fair means treating everyone the same, there are cheaper and easier ways to redistribute

I expect you don't mean that or do you mean everyone should get the same amount of money? (ie the wealth of the country should be shared out and everybody treated equally in the amount they receive.)

McKneff

Lokolo wrote: »

Individuals in receipt of the following benefits and tax credits will be entitled to open
an account: Working Tax Credits; Child Tax Credits paid at the maximum rate; Income
Support; Jobseeker’s Allowance; Incapacity

Well thats crap. I don't get any of that, I am just a student. Damn that government ruining my plans!

:rotfl: :rotfl: :rotfl:

what about the pensioners, arent they on low income too

Lokolo

anniehanlon wrote: »

:rotfl: :rotfl: :rotfl:

what about the pensioners, arent they on low income too

I'm 20. I have many many years yet til I start to worry about becoming a pensioner!

1echidna

loaner wrote: »

No I mean fair means treating everyone the same in terms of tax, same allowance, same tax rate, same vat rate. If you happen to be wealthy, you will always pay more tax than if you are poor, because spending is taxed, and a higher wage means a higher tax take.

The tax allowance and benefits system allows for redistribution so that the less wealthy have a minimum standard of living, without the need for superfluous and complicated schemes such as the one in this thread.

My view of fairness is somewhat selective, in part because there is no such thing as absolute fairness but yours is even more selective, confined as it is to taxation and nothing else. Arguably there is little that is really fair about the discreptancies in salaries for different jobs, let alone wealth or position gained by inheritance.

I see this scheme as giving some modest return for those of working age, but in difficult circumstances, by being extremely frugal to save to give themselves an emergency fund or for a special purchase.

1echidna

loaner wrote: »

So give them a higher tax allowance, higher pension, or more benefits. It's an ill-concieved headline grabber, nothing more. There will always be someone better off than you, that's life

I suppose all governments look for headline grabbers (and this one has a bad record of 'nothing' measures being trumpetted). This particular one seems better than some. Not sure about admin costs but perhaps in these computerised days not too prohibitive.

Blah99

1echidna wrote: »

although it might be hard on the nurse (and it would need to be a pretty junior one) whose income is just above the cut off this does not destroy the validity of the exercise.

The entire exercise is a total moral hazard failure.

1echidna wrote: »

Whilst some benefits are rightly available universally this particular measure if universal would be taken up more by the better off in society and would actually distribute wealth more to those least in need of it.

"Least in need" is a subjective statement. I'm sure there are lots of families out there that won't qualify for this scheme but are in desperate need of it. Their taxes will go to providing even more money to benefit claimants.

1echidna wrote: »

Personally I don't wish to live in society where benefits are enough for bread and water and not much more. I agree we are quite a long way from that but most on benefits live frugally and a proportion live very frugally and manage to put a bit away for a special purchase or holiday. It seems a bit like reverse envy to begrudge a very small proportion of the total tax take to encourage a little bit of saving by the poorest in society.

You are missing my point. This is not a welfare state benefit, this is an outright profit exercise for benefit claimants. We need to separate "benefits" from this Savings Gateway. The entire point of benefits and the welfare state is to allow people to live in society when they have no way of generating any income (although a trip to many council estates might dispel that view). What the savings gateway does is allow people to profit from the welfare state by giving them a 50% interest rate on the money they've already been given.

Let's put it this way. Assuming my figures above are accurate, it means about £3 for every working adult in this country will go to paying the Savings Gateway interest. Now get all the taxpayers to line up outside Downing street and physically give the Chancellor three £1 coins. How popular do you think that would be?

1echidna wrote: »

Taxing higher income people is not self defeating it goes someway, amongst other things, to creating a fairer society where accidents of the family one is born into or personal ability are not the be all and end all of ones financial circumstances.

There is a difference between fair taxation and envious taxation, the latter being what we're now moving to. If you keep bumping up the tax take on high earners many will simply pick up and leave the country, making it a self defeating exercise. The high earners are usually the wealth creators and the industrial drivers of the country - the top scientists, CEOs, entrepreneurs etc. If they leave, not only are their tax revenues lost but their benefit to the country is lost too (GDP, employers etc).

The fact is that welfare states have an obsession with trying to equalize the marketplace, and it just doesn't work. It's an unfortunate fact of life that not everyone has the ability to be successful. Some people will be Einstein, some will be CEOs, some will be white collar workers, some will drive forklifts and some will sit on their !!!!!! doing nothing. That, I'm afraid, is life, and if you are unhappy with your lot then you have every right to get off your !!!!, improve yourself and do something about it.

Unfortunately far too many people would rather sit around moaning about how bad things are and how unfair it is that the CEO of Acme earns £1million, rather than actually trying to do something about it.

JCB2020

Lokolo wrote: »

I'm 20. I have many many years yet til I start to worry about becoming a pensioner!

The way things are going you will never get to be one!
There wont be any money to pay you a pension, so you will need to work until you die.

How long to you think its going to get rid of the current debt mountain.

There arnt enough people to pay for these crazy nu old labour so called policy initiatives.

thor

WEll when the CONservatives get in they will be able to solve the pension problem once and for all. They will proceed to sell off the entire NHS to their 'friends' who will run it at a massive profit. But will only provide the service for those who can 'contribute' on top of the the tax they are already paying which will help to reduce pensioner numbers so that the slice of the pot for the remaining pensioners will be greatly increased. Also don't be surprised to see the anti smoking laws reversed as I am sure there are a few tory smoking lobbyists who need the tobacco companies to be doing better so that they can supplement their own income. A happy side effect for them is that this will too reduce the aged population.

john_s_2

Governments use financial incentives to encourage behaviours that the Government thinks are desirable.

MIRAS for example, encouraged a lot of people to buy their own homes. I don't have any figures to hand but I'll bet that rewarded individuals with a lot more taxpayers' money than this scheme will. And we're not talking about the poorest individuals in society either. EVERYONE with a mortgage to buy their property was entitled to tax relief on the first £30K of their mortgage. (And in the 80s, £30K could buy you a house in some places.)

The line has to be drawn somewhere - where that line drawn is always going to be a valid criticism of schemes like this. But that there has to be a line is not a reason not to do it.