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We all pay your benefits
Comments
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I'm saying the problem is with working tax credits: to be clear they should be massively scaled down or scrapped all together.
Scrapping WTC, if done in isolation from other benefit reform, would massively increase the number of people who would be better off on benefits than they would be working. I don't imagine that's really what you want, is it?
That's why WTC is being replaced by UC, so that what people get, whether in or out of work, is all part of the same system. It's supposed to eliminate the "better off on benefits" issue, and the wildly differing effective marginal tax rates for the low paid with only slightly differing circumstances. IMO this is a great idea in theory. I wait to see how it will turn out in practice.Do you know anyone who's bereaved? Point them to https://www.AtaLoss.org which does for bereavement support what MSE does for financial services, providing links to support organisations relevant to the circumstances of the loss & the local area. (Link permitted by forum team)
Tyre performance in the wet deteriorates rapidly below about 3mm tread - change yours when they get dangerous, not just when they are nearly illegal (1.6mm).
Oh, and wear your seatbelt. My kids are only alive because they were wearing theirs when somebody else was driving in wet weather with worn tyres.
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The only way an economy can move is through people spending. Earners who can freely save large sums of money does not fit that profile. Savings do not keep people in jobs, spending does (retailers/manufacturers/other private sectors/public sector etc)
Now, knowing that, is it any wonder that the government keep people in benefits so easily?
Seriously, I think you need to take an economics class.
Government transfers to benefits claimants might increase spending, temporarily. Poorer people do have a higher marginal propensity to consume.
But I'm afraid you are wrong about how this affects the economy. Savings are not 'trapped'; they provide the funding for investment in productive assets, which is just as much a component of economic growth as consumption. It also creates capital within the economy which continues to provide economic returns.
Benefits are not an efficient way to use government spending to boost economic growth for a variety of reasons. Typically they much prefer to use investment projects like HS2 rail (although why they think they would be so much better at selecting investments than the original private owners of the money remains a mystery to me!).
Benefits are a great way of buying votes though. Part of the Labour project is to extend benefits as much as possible. Take money off the middle classes and give it back to them to make people have a stake in te continuation of the benefits system. This was very much the political logic behind things like the working tax credit.0 -
Scrapping WTC, if done in isolation from other benefit reform, would massively increase the number of people who would be better off on benefits than they would be working. I don't imagine that's really what you want, is it?
That's why WTC is being replaced by UC, so that what people get, whether in or out of work, is all part of the same system. It's supposed to eliminate the "better off on benefits" issue, and the wildly differing effective marginal tax rates for the low paid with only slightly differing circumstances. IMO this is a great idea in theory. I wait to see how it will turn out in practice.
A good point
The system is so complicated that is it difficult to see the consequences of changing each part.0 -
That's why WTC is being replaced by UC, so that what people get, whether in or out of work, is all part of the same system. It's supposed to eliminate the "better off on benefits" issue, and the wildly differing effective marginal tax rates for the low paid with only slightly differing circumstances. IMO this is a great idea in theory. I wait to see how it will turn out in practice.
It's mathematically impossible to solve this problem. You have to take the money off people at some point as their earnings rise, unles you move to a citizen's income kind of model0 -
princeofpounds wrote: »It's mathematically impossible to solve this problem. You have to take the money off people at some point as their earnings rise, unles you move to a citizen's income kind of model
Yes, that's why I say I'll wait to see how it works out in practice. I can appreciate the reasoning behind trying to change things so that they way it's taken away is more consistent and comprehensible, though, which AIUI is the motivation for the change to UC.Do you know anyone who's bereaved? Point them to https://www.AtaLoss.org which does for bereavement support what MSE does for financial services, providing links to support organisations relevant to the circumstances of the loss & the local area. (Link permitted by forum team)
Tyre performance in the wet deteriorates rapidly below about 3mm tread - change yours when they get dangerous, not just when they are nearly illegal (1.6mm).
Oh, and wear your seatbelt. My kids are only alive because they were wearing theirs when somebody else was driving in wet weather with worn tyres.0 -
princeofpounds wrote: »It's mathematically impossible to solve this problem. You have to take the money off people at some point as their earnings rise, unles you move to a citizen's income kind of model
the arithmetic of the high marginal rates of deductions of a means tested benefits system is indisputable.
however the overall level of benefits is another matter0 -
You're not the first person to think so:
http://en.wikipedia.org/wiki/Speenhamland_system
The Poor Law Commissioners' Report was an investigation into the relief of poverty which lead to the universal use of the workhouse as the only prescribed method of poor relief for the 'able bodied poor'.
Interesting that 200 years on we still have similar problems."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
where did they live in the 90s?
remember HB subsidised evil landlords
WTC subsidise evil capitalists
all these absurdities have unintended consequences
Why do they do successive governments persist in using one variety or another?"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
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princeofpounds wrote: »Seriously, I think you need to take an economics class.
Government transfers to benefits claimants might increase spending, temporarily. Poorer people do have a higher marginal propensity to consume.
But I'm afraid you are wrong about how this affects the economy. Savings are not 'trapped'; they provide the funding for investment in productive assets, which is just as much a component of economic growth as consumption. It also creates capital within the economy which continues to provide economic returns.
Benefits are not an efficient way to use government spending to boost economic growth for a variety of reasons. Typically they much prefer to use investment projects like HS2 rail (although why they think they would be so much better at selecting investments than the original private owners of the money remains a mystery to me!).
Benefits are a great way of buying votes though. Part of the Labour project is to extend benefits as much as possible. Take money off the middle classes and give it back to them to make people have a stake in te continuation of the benefits system. This was very much the political logic behind things like the working tax credit.
That's very informative thank you.
It's a wonder when the 'global economy crisis' hit which caused our prolonged recession (or so the media will portray), that the banks were whinged at for not loaning money and thus halting the economy, they should've been commended then for having savings and investments in their hands.
I wasn't saying that savings are not important (I realise I worded it wrong), but the retail chain depends heavily on people spending rather than saving. Retailers, manufacturers, restaurateurs, hoteliers, the tourist industry etc contribute a huge amount to both tax and employment (including the hiring of cleaning contractors, stationary ordering etc), the web is massive.0
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