Should Millionaire Mick lead to the abolition of Tax Credits?

grizzly1911

chewmylegoff wrote: »

That said, I think that your central point (scrap tax credits, raise the tax threshold) is eminently sensible and the case for it is easily made without needing to refer to this horrid set of events.

.


I agree that to raise the threshold and remove tax credits is a good way forward.

It i something that needs to be thought through, done quickly with thresholds raised to the whatever full amount is decided rapidly. The drip feed, satggered approach we have had with the current increases has in part being consumed by inflation.

If it the various departments can't cope with such rapid change bring the change in rapidly but implement in on a rolling programme.

PaulF81

The Guardianad leftie MP who wrote the article got slammed this morning on the Today programme. almost felt sorry for her, but she had absolutely no come back from what was a very comprehensive smashing from a well spoken and obviously very well to do tory.

Love it.

wotsthat

I started a thread about the Philpott's just before the trial started as being one to watch for anyone interested in benefit abuse. It seems to have been deleted but I did wonder if there would be a knee-jerk benefits back lash.

It's been delayed (mainly due to the sex lives of the Philpott's - tabloid gold!) but does look to have arrived. I agreed with everything George Osborne said but his statement was clumsy to say the least - using Mick Philpott as a poster boy for benefits cuts does smell of political point scoring.

What Osborne doesn't get is that whilst most people would eventually look to the world of work in the face on benefit cuts Philpott was basically unemployable and it's very likely that, rather than work, it would be criminal activity which filled the gap.

Agree with the central premise in the OP though. My sums might be slightly out but it seems that with wages and WTC Mairead's part-time cleaning job at the local hospital was 'worth' c£30k. Looks like WTC encourages people to seek subsidies rather than productive work. Also highlights the fact that it's virtually impossible to make work a more attractive alternative to state reliance for large families in the UK.

John_Pierpoint

I think you have the main point.
Back in the 50s & 60s there were jobs for virtually everyone who needed one.
I can still visualise the Daily Express (in those days the equal of the Daily Mail) with the shock headline 500,000 as the number of unemployed.

However as technology moved on, minimum wages were introduced, and "credit" enabled those with reasonable security to gear up their standard of consumption there has emerged an underclass, very nearly unemployable and with serious attitude problems. In order to keep down the "shock horror" headlines about unemployment, some of these members of the "Precariat" have been shuffled onto long term benefits and some more hopeful cases are playing at self employment, in order to claim working tax credits.

The Romans tried to buy off such "do what you must and avoid what you can" citizens with "bread and circuses", while trying to suck in taxes from their colonies, and as that failed they resorted to debasing the currency.

Time for another feel good Olympics?

MacMickster

Tax Credits were an experiment in social engineering, with the idea that reducing child poverty in the UK would produce better educated children, less anti-social behaviour etc. etc.

Predictably, however, this merely encouraged some to produce more children in order to gain access to ever increasing amounts of tax credits. Whilst the original aim may have been laudable, the failure to cap the benefits to 2 children has lead to widespread abuse.

Tax credits also brought about a culture of part-time working. The withdrawal rate combined with income tax, national insurance and the loss of other income-related benefits made the idea of working 40+ hours per week for minimum wage something that only the truly dumb would consider.

Time to scrap tax credits now and reintroduce a hunger to improve their lives to the benefits generation.

mummyroysof3

I would rather them introduce not paying any tax for low paid people and better help with childcare. This surely would encourage couples where both work and discourage families with a large number of children as working people don't have as much time so I think would stick to a smaller number of children. I don't work ATM but 3 is more than enough for me. I don't see how it's possible to look after that amount of children properly and keep a nice home.

StevieJ

MacMickster wrote: »

Time to scrap tax credits now and reintroduce a hunger to improve their lives to the benefits generation.

Also may apply pressure on employers to pay a living wage,then again we may just go back to the days when Britain was great and most of its citizens could barely afford to exist

N1AK

Mr_Mumble wrote: »

A lump sum of £4,265,745.95 is required to get an annuity that pays out what Philpott was 'earning'. Philpott was a multi-millionaire!

It would hit hardest those following similar tactics to Mick Philpott... not a bad trade-off.

Philpott isn't a 'millionaire', any more than you are 'dead', if you have to completely ignore the real definition of a word to shoehorn it into your argument then it detracts from the whole argument. It's especially pointless to do so when his income via benefits can accurately be described as shocking.

The hardest hit by a benefit cap will include some people who 'game' the benefit system to collect large incomes; it will also include a number of people who have large families without that intention and it will certainly include a great many children who aren't responsible for their family circumstances.

When the papers praised the government for dropping the duty on beer why didn't they attack the government for giving alcoholics, violent drunks, abusive partners etc a tax cut? Because they appreciate that just because some of the people covered by the change are 'bad' doesn't mean everyone is.

What Osborne and the Mail have done is pathetic (even if I expect no less from the mail). They want to use the death of a family to imply that all big benefit claimants are immoral scum.

I've never voted Labour before, I agree strongly with conservative efforts to reform welfare (though not every policy) but this kind of disgusting behaviour adds to the ongoing list of odious actions by conservatives that are making it increasingly likely that I will be voting against them in future

dori2o

grizzly1911 wrote: »

.


I agree that to raise the threshold and remove tax credits is a good way forward.

How does raising the tax allowance help someone already earning below it?

How does it help those already working full time on NMW

As an example, a 2 parent family with 2 children, no childcare.

Both parents work, 1 works 40hrs a week at NMW the other works 16 hours at NMW in order to be able to car for the children after school as childcare is so expensive.

This family is earning approx £18k gross.

They would be entitled to approx £90 a week tax credits.

Increasing the tax allowance to £12k would save this family about £600 a year, but by removing the tax credits you are taking away £5k a year from them.

You cannot remove tax credits without replacing the income first, or making it cheaper to live.

One option is to increase the NMW alongside increasing the tax allowance. However, Businesses would never allow that to happen to such a scale that there was little effect on the poorest working families.

An incresae in the NMW could be more than paid for by the scrapping of employers NICs and the proposed reduction in corporation tax.

We all hear on these boards how 20+ years ago people were able to raise their kids without help from the state. However by the same token, the bare essentials of an existance, didn't cost 70% of the standard monthly salary.

The cost of living has been allowed to rise so much under successive governments, made worse by the Thatcher ideal of selling off the public sector into private hands, that state help for the lowest paid is now unavoidable.

In the past there was no such thing as fuel poverty as gas/electricity/fuel was affordable and not held as the plaything of fat cats looking for ever increasing profits.

Personally I would like to see a rise in the NMW to somewhere around £8 per hour.

Alongside this the personal allowance should either a) be fully transferrable between couples (married or not) or b) it should be replaced with a household allowance which can be split as the household decides.

For example, if the household allowance was £20k for upto 2 adults, then the household could decide to have only 1 working parent and allow them to earn upto £20k tax free, whilst the other parent stayed at home to raise the kids.

Both parents could work but split the allowance however they wish to make it economical for the household. i.e. they could split it £15k/£5k or £10k/£10k or whichever is the best way for them.

Simply abolishing tax credits/UC will do nothing but plunge the majority of the country into debt/despair and take us back 100+ years to the days of the slums, the poor houses and the work houses.

Is that what a civilised society really wants?

coastline

As far as I can remember both Tory and Labour have had a hand in the working tax credit payments.
Years ago there was a Married Mans allowance which has been slowly phased out since 1990.. if still in place today the basic tax allowance might be in the region of £15,000 before tax..??

http://www.taxhistory.co.uk/Income%20Tax%20Allowances.htm

What are we to do in a situation where there is really mass unemployment despite all governments telling us theres 2.5m on the dole....as posted earlier it stood at 500,000 in the late 1960's.
We've got 2m at Uni...another 2m on sickness benefits and many early retired which was unheard of years ago.
Part time work has boomed in recent years where its now over 8m people...and we have well known companies employing workers on "zero contracts"..they ain't even working part time anymore.
Social housing is in decline so who picks up the tab for the shorfall in weekly income...we all know the government.
Maybe there is people who try their best not to work but theres millions who would like no better than to work full time and buy a home.
Tax credits are in the news but it appears they are only tackling the bottom end of the government hand out areas.
Tax relief on pension schemes amounts to £20bn a year and higher rate tax payers receive £12bn...this would go a fair way to reducing the budget deficit.
Why do people with money need hand outs...there'll be other areas where tax relief should come into question..

http://www.telegraph.co.uk/finance/personalfinance/pensions/9658795/Top-earners-are-pocketing-pensions-tax-relief-worth-25000-a-year.html