Think the unthinkable - let's help the coalition with some blue-skies thinking...

lynzpower

remove the PC parade of do nothing jobs in the public sector. we need common cense, not new rules to teach the world to sing

Sorry but that is just classic

PrivatisetheNHSnow

carolt wrote:

Think the unthinkable

Change our monetary system from the exploitative current system based on debt and usury that's designed to benefit bankers and financiers to one that's designed to benefit common people and the productive economy.

http://www.economicstability.org/current-events/a-solution-to-the-financial-crisis-debt-free-money#hide

ninky_2

carolt wrote: »

I'd like to see the disparity between the tax and benefit systems removed, whereby benefits are awarded on the basis of family needs (eg size, disability etc), but tax is taken on an individual basis only.

This means that, currently, a typical family with 1 parent who works and gets a good salary pays the same tax as someone with no dependents. .


We need to MAKE WORK PAY - surely this would be one way to help make this happen?

surely this is what tax credits already do? as a couple with no children we pay full tax whilst if we had children we'd get tax credits.

LydiaJ

carolt wrote: »

I thought the wealth of creative, brilliant minds on this forum could help our new government along with a few suggestions for how/where to make changes in the system.


My suggestion first, to get the ball rolling:

I'd like to see the disparity between the tax and benefit systems removed, whereby benefits are awarded on the basis of family needs (eg size, disability etc), but tax is taken on an individual basis only.

This means that, currently, a typical family with 1 parent who works and gets a good salary pays the same tax as someone with no dependents. Tax allowances are not transferable betwen spouses, even if 1 parent is a low/no earner, and having extra needs eg dependents is ignored.

But if the same family don't work, their needs are taken into account, and they are rewarded financially for every additional child - leading to the situation where for many families, it's just not worth bothering to work - particularly larger families - as by the time they've added up the free accomodation costs they get through LHA, free council tax, child benefits and tax credits, income support and other extras like free prescriptions, free milk, extra child trust fund payments, EMA, etc, as well as work-related costs saved (like transport and clothing), it just makes no sense for either of them to work.

Even for those on lower incomes who do get some of their tax back through child tax credits, would it not make more sense (and vastly simplify the admin costs and the opportunities for large-scale fraud that have been reported) if instead they just got taxed less in the first place, so they could actually live off their earnings themselves, rather than the ludicrous system of taking with 1 hand and giving back with the other?

We need to MAKE WORK PAY - surely this would be one way to help make this happen?


Anyone else - what do you think would be a good suggestion to help restore our lovely country to its former glory?

Good idea for a thread. Thanks for starting it, carolt.

Two points:

Firstly, while I agree that the current system penalises couples with one high earner and one low earner or non-earner, be careful what you wish for about taxing households rather than individuals. That's the way it used to be done. A couple would get one personal allowance plus one married man's allowance, or something like that. Two single people got a personal allowance each, and became much worse off if they became a couple. That's why individual taxation was introduced.

Secondly, lower earners do not "get some of their tax back in tax credits". In many cases they get much more in tax credits than they have paid in tax. "Tax credits" are a very misleading name. They are a benefit, usually payable to the parent with primary care of the children, and have absolutely nothing to do with tax, beyond the fact that they are administered by HMRC.

Pennywise wrote: »

We need a single state benefit structure. A one-stop shop for all state benefits, all based on a single qualifying structure. Inputs being age, number of dependants, working history, disabilities, other income, savings, house value, etc., all going into a "super-equation" which comes out with a "figure" of benefit entitlement. It's madness that some benefits don't take into account savings, others don't take other income into account. We've far too many kinds of benefits, all with different qualifying criteria. It can, and must, be simplified.

While I agree that it all needs simplifying, I don't agree that the same criteria should be used for all benefits. Different benefits are provided for different purposes, and I don't see why the qualifying criteria shouldn't be different too.

For example, as a comparatively low earner, I get tax credits. The childcare element of it depends on my income and my childcare costs. It's supposed to help make work pay, which it does. It doesn't need to depend on my previous NI contributions, or my housing situation, or my savings (apart from the interest on them being part of my income), or anything else.
(ETA: I think tax credits are too generous, at least for someone at my income level. I expect them to be cut, and I think they ought to be. However, I still think the means testing should be about income, children and childcare costs, not savings.)

I also get widowed parent's allowance. It depends on my late husband's NI contributions, which makes sense because it's there to make up to me in some small way for the fact that he's not there earning anything to support me any more. There's no need for it to depend on anything else.

I don't get council tax benefit. Although I have low income, I have savings, so I don't qualify. It's reasonable for this to depend on savings, because I could choose to live in a smaller house and pay less council tax, or I could choose to use my savings to pay my council tax.

If the help that CTC gives me with childcare depended on my savings, that would be the system sending me a message to say "We want you to work, so we'll help to make work pay, but if you've been prudent and saved anything then you might as well not bother working until you've used up all your savings." Is that really the message we want to send out?

If my widowed parent's allowance depended on my savings, that would be a kick in the teeth in a difficult situation, and once again it would be a big disincentive to save.

jonewer

Sack all benefits and replace them with a single rate citizens income available to everyone, in conjunction with a flat tax rate combining NI and income tax.

dopester

carolt wrote: »

Anyone else - what do you think would be a good suggestion to help restore our lovely country to its former glory?

As well as so many reforms, I'd like the DMO to have the facility of accepting direct donations towards paying down the national debt.

From people in the UK who are able and want to help the cause - beyond taxable contributions they are legally obliged to pay. Also open to people who are friendly and loyal to the UK from all around the world.

http://www.dmo.gov.uk/

With details of how to make payment with PayPal, cheque, or direct transfer via sort-code and bank account number, IBAN, BIC/SWIFT (International) ect.

A few billion, perhaps more, might be possible to be raised annually. Hey... the UK has serious financial imbalances which pose serious risks to the country. Can you help with the debt problem? Every little helps. (Something snappier than that though). There are many worthy causes in the world but helping towards paying down the debt, where you voluntarily can, is also very worthy.

lynzpower

jonewer wrote: »

Sack all benefits and replace them with a single rate citizens income available to everyone, in conjunction with a flat tax rate combining NI and income tax.

Bonkers. So the person who is elderly or disabled who needs home care, bathing dressing etc gets the same amount of money as me 100% able bodied and healthy and able to work.

You might as well not bother.

jonewer

lynzpower wrote: »

Bonkers. So the person who is elderly or disabled who needs home care, bathing dressing etc gets the same amount of money as me 100% able bodied and healthy and able to work.

You might as well not bother.

I'm not talking about the NHS, I'm talking about the bizarre range of benefits and tax credits out there, many of which are a dis-incentive to work and and represent a 'benefits trap' where effective tax rates for those attempting to return to work can be as high as 95%.

With a single citizens income, there is no disincentive to work for fear of reducing your benefits, so any income you manage to generate makes you wealthier. There is also no disincentive to save for old age. Altogether it promotes a very strong incentive to save, be prudent, look after yourself, and prosper!

The citizens income would save money by simplifying the administration of the current morass of benefits, and avoid the estimated £2.6billion lost each year to fraud and mistakes.

And why shouldnt everyone get the same? Thats the exact principle the NHS is founded on. Everyone from a vagrant to the Queen gets the same care provided free at the point of delivery.

As to "why bother", well if you dont, you will be the poorest person in the country. Which is not much fun for anyone. There was a study a while back where people were asked, all other things remaining the same, if they would rather earn £1million and everyone else in the country £100,000, or, would they rather earn £10million and everyone else £100million. Its of note that virtually everyone questioned chose to earn ten times less, just so long as they earned ten times more than everyone else!

Such is human nature.

LydiaJ

The NHS does not provide home care for people who need help with dressing/bathing etc. They have to pay for it. It is very expensive. They can claim some benefits to help with the cost of it.

Gorgeous_George

Make it law that anyone working 40 hours per week will earn enough to buy or rent a house (or half a house?) within 20 miles, or to be provided with tied accommodation by their employer.

Taxpayers should NOT subsidise employers by paying benefits to their employees who work full time.

GG