IDS want rich to hand back benefits...

System

There's nothing intrinsically different between a hand-out in cash or kind or using a subsidised service.
Does he mean the "rich" should not use public transport, hospitals, state education, the police, or any other local or national government service?
Presumably IDS doesn't claim tax relief on ISAs or pension contributions, and pays for his own security costs?

grizzly1911

Generali wrote: »

The words 'entitled to' go to the very heart of what is wrong with the economies of The West.

People will insist that they are 'entitled to' up until the very moment that the state goes bust. Obama won the Presidency under a banner of letting people keep what they're 'entitled to' despite it being absolutely clear that means that the US Medicare and Social Security systems will go bust.

Life is a !!!!! having to share the planet with disadvantaged souls.

Having to carry the sick, weak, poor and unemployed (many through no fault of their own) is such a burden.

Medicare appears to have been built and expanded on a broken model. First and foremost the bedrock puts private sector profits first rather than patient care on a not for profit basis. Healthcare in the US looks like road crash.

Must go and by some more weapons of mass destruction, much more important.

wymondham

Generali wrote: »

The words 'entitled to' go to the very heart of what is wrong with the economies of The West.

People will insist that they are 'entitled to' up until the very moment that the state goes bust. Obama won the Presidency under a banner of letting people keep what they're 'entitled to' despite it being absolutely clear that means that the US Medicare and Social Security systems will go bust.

fully agree, but this comes from the Government. They have been saying for years that people should claim what's rightfully theirs. They even published figures for the amount that was unclaimed if I recall correctly...

wymondham

Put it this way. If you could get the Government to give you £100 a week just for asking, would you? Even it you didn't need it? I think we ALL would???

mystic_trev

I think you'll find it more likely for a poor person to miss out on benefits, than a rich one to give them up!

the_flying_pig

grizzly1911 wrote: »

...Perhaps taxing universal benefits, at an individuals marginal rate, would be a quick and simple solution but that would entail lots of extra work for HMRC, negating the revenue collected.

i could easily be wrong, this being outside my personal experience, but the state pension is taxed, right? so a person with a big retirement income only gets to keep 55-60% of the full state pension.

that's a start, i suppose.

winter fuel allowances aren't taxed, though, and i don't think that free bus passes & whatnot are treated as taxable benefits.

i personally think that giving this kind of benefit to all is insane. totally crackers. sometimes the state buying stuff and dishing it out to all without means testing kind of helps to bind us together as a society, e.g. letting the rich send their kids to state schools, use state-built roads & state-funded hospitals etc, but daft handouts that rich retirees will spend on, what, Caribbean cruises, it's just, well, it defies belief.

chewmylegoff

wymondham wrote: »

Put it this way. If you could get the Government to give you £100 a week just for asking, would you? Even it you didn't need it? I think we ALL would???

It's all very well saying that but what are the consequences. If everyone got the govt to pay them £100 a week then everyone would need to pay £100 more a week in tax to fund it.

I can see where IDS is coming from - although it is a fundamentally naive position - but the most efficient benefits model in theory would be one where there are no limits on claims but individuals only claimed the minimum amount necessary. Of course if you implemented such a system 99% of people would abuse it.

Therefore you are left with a system where you set the claims level at a certain point and restrict access to the system. With something like a winter fuel payment it is probably cheaper to just pay to everyone than to attempt to identify who really needs it and only pay it to them.

A single means tested benefit to bring income up to a certain level is one solution. Taxing benefits is another.

chewmylegoff

the_flying_pig wrote: »

i could easily be wrong, this being outside my personal experience, but the state pension is taxed, right? so a person with a big retirement income only gets to keep 55-60% of the full state pension.

that's a start, i suppose.

winter fuel allowances aren't taxed, though, and i don't think that free bus passes & whatnot are treated as taxable benefits.

i personally think that giving this kind of benefit to all is insane. totally crackers. sometimes the state buying stuff and dishing it out to all without means testing kind of helps to bind us together as a society, e.g. letting the rich send their kids to state schools, use state-built roads & state-funded hospitals etc, but daft handouts that rich retirees will spend on, what, Caribbean cruises, it's just, well, it defies belief.

"Letting" the rich send their children to state schools and use public roads and hospitals?????

Do you mean confiscating the incomes of the "rich" through taxation and then spending it on state schools, hospitals and roads for everyone to use? It would be a pretty strange world if the govt took half of your income and then turned around and said "sorry chum, you're 'rich' so you can't use any of the services you have paid for"!!

grizzly1911

Pensioners pay a third of income in tax, research shows

Pensioners end up paying back a third of their income to the Government through taxes, new research


A typical retired household has an income of £17,727, but £5,315 of this is paid out in direct and indirect tax, according to financial services group MetLife Europe.

Income tax accounts for the biggest share of the money that is handed over to HM Revenue & Customs at nearly £1,500, followed by VAT, which costs an average pensioner household £1,229 a year.

Retired people also typically pay £874 in council tax and £542 through duty on tobacco, alcohol and petrol.

Overall, an average of 13.4 per cent of retired households’ income is paid out in direct taxes, such as income tax, with a further 16.6 per cent paid in indirect taxes, such as VAT, duty on tobacco, alcohol and petrol, and road tax and the TV licence.

Less well off pensioners pay out an even higher proportion of their income in tax, with the poorest fifth of retired households handing over 40 per cent of their £8,390 income to HM Revenue & Customs.

Dominic Grinstead, managing director of MetLife's UK branch, said: “Pensioners need to be aware of the effects of direct and indirect tax on their retirement income and to plan accordingly.
“Tax does not end when you stop working and clearly 30 per cent of gross retirement income being swallowed up by tax is a major factor to consider when planning for retirement.”
Pensions experts warned pensioners are disproportionately hit by taxes.
Laith Khalaf, a pensions expert at Hargreaves Lansdown, said: “Pensioners generally pay low rates of tax on their income but can be hit hard by other taxes. In particular council tax is one expense which continues into retirement after you have paid off your mortgage.”

http://www.telegraph.co.uk/finance/personalfinance/pensions/7645397/Pensioners-pay-a-third-of-income-in-tax-research-shows.html

Older pensioners are more likely to be at the bottom of the income scale, as are single female pensioners

MS1950

wymondham wrote: »

http://www.bbc.co.uk/news/uk-22327335

Interesting article. Although completely entitled to them he is asking richer people to hand back their benefits.

I'm a firm believer that people should always claim what they are entitled to, indeed the Government itself has spent years pumping this message out. Surely if it does not want millionaires to claim free TV licenses then why not be radical and not allow them to be eligible? (of course this should reduce the tax they pay as well if they wont get the benefits?) This way these better off people don't have to feel guilty claiming for something they are legally entitled to.

To me this is a sign of lack of imagination and creativity when forming a policy. I don't agree with lots of instances of people getting benefits etc, but it's not their fault - it is because they are encouraged to claim and have an entitlement to do so, so would be slightly odd if they didn't!

Should people have a conscience and not collect these benefits if they are rich, although they are 100% entitled to them?

This idea was also aired in a fairly disgraceful (from a journalistic standpoint) programme ‘Rich and on Benefits’ by Michael Buerk on Channel 4’s ‘Dispatches’ on March 18th – where we were presented with a group of comfortably off Home Counties Golf Club members – and incredibly Peter Stringfellow – as representative of ‘rich’ pensioners. During the programme Buerk also engaged in a stunt where he was shown phoning DWP from his plush living room to ask how to give back his age-related benefits.

However, the truth is that, although all people above the required age are ‘entitled’ to these benefits – state pension, winter fuel allowance and free bus pass - they have to actively apply for them to get them (fill in a form & supply bank details etc) – so all those like Mr Buerk and his comfortably off friends who say they don’t need these benefits need not apply for them.

And does anybody believe that ‘rich’ or even ‘comfortably off’ pensioners (however that’s defined – which it usually isn’t) are actually riding around on buses using their passes to any significant extent – most such people will probably have cars and won’t have been on a bus in years.

But the programme completely undermined its main claim about ‘rich’ pensioners when it (briefly) discussed solutions. The idea of taxing these benefits (and the state pension is already taxable) was dismissed on the grounds that it wouldn’t raise enough to make it worthwhile – suggesting that (unlike Buerk’s golf club members or Stringfellow) the incomes of the vast majority of pensioners are too low to yield much if these benefits were taxed.

Personally, I think they ought to be taxed – the overall administrative cost would almost certainly be lower than means testing and it would also avoid the problem of those pensioners reluctant to undergo a means test, but who need the money.

Duncan-Smith’s latest PR wheeze – like Buerk’s programme – and other recent government claims about disability related benefits (most of which have been demonstrated to be untrue) seem to be simply part of a political strategy to disguise the real effect of their welfare reforms – and prepare public opinion for worse to come.