Tax Credits

zagfles

setmefree2 wrote: »

Unfortunately that article in The Mirror includes a video which does appear to have Cameron doing just that.

Usual out of context selective snips and political weaving. The elements of tax credits haven't been cut, the changes are to the taper rate and thresholds. Perhaps his answers were misleading, but they're certainly less of a lie than Labour's promise not to raise tax rates or introduce top-up fees, or the LibDem's promise not to support student fee increases, which were (IIRC) written into their manifestos!

zagfles

setmefree2 wrote: »

As I stated you misunderstood my post.

But your post raises interesting points. Do / did we need such a complicated system?

What's the highest amount of income that attracts tax credits now?

There is no limit. Someone with 10 disbaled kids and childcare costs could get tax credits on an income of £200k.

setmefree2

Alistair Darling: why I changed my mind on tax credits

I think the other thing is there was an assumption, probably throughout the 90s and a lot of the last decade, that simply getting people in to work was good enough in itself. And, you know, nature would take care of the rest. It hasn’t. That’s why I think the problem of low pay is one of the big political challenges for the next five years.

FN: So, tax credits designed to promote equality of outcome ended up promoting inequality of wages?
AD: I just think that whenever you introduce any policy on tax, on spend, on benefits, you need to look all the time as to what it’s actually doing – and what are the unintended consequences. One of the unintended consequences is that we are now subsidising lower wages in a way that was never intended.

http://blogs.new.spectator.co.uk/2015/07/alistair-darling-why-i-changed-my-mind-on-tax-credits/

zagfles

setmefree2 wrote: »

My post was about working the system to claim free school meals.

Keep up

You can't tell me that free school meals are intended for anyone other than the poor, surely.

But michaels's plan isn't to benefit from FSM. He would in fact probably lose because he'd lose his WTC for a while. His plan is benefit his kids' school by getting them the pupil premium, which apparently a short while on FSM entitles the school to for several years.

And anyway, those are the rules decided by govt and other high income people can benefit. For instance if a premiership footballer on £50k a week split from his wife, who doesn't work, and paid her a million a year in child maintenance, she'd still be able to claim full CTC and get FSM. Since child maintenance does not count as income for tax credits.

Again, complain about the rules. Not about people who understand them and use them for their benefit. If everyone exploited all these fairly simple to use allowances in the system, then the system would have to change to something better.

jimibaboza

Wait a minute. They were changed to something better and yet the first thing we get on this thread is someone happily admitting to fiddling their income to keep getting their government handouts. The same thing happened when the child benefits rules were changed so it sounds to me if the law is changed then all that happens is that people then look for another loophole to exploit.

So wheeze is there in place to avoid the 40% tax rate on pension earnings? I assume there is one, otherwise these types of shenanigans is pointless.

michaels

setmefree2 wrote: »

Alistair Darling: why I changed my mind on tax credits









http://blogs.new.spectator.co.uk/2015/07/alistair-darling-why-i-changed-my-mind-on-tax-credits/

The contention seems to be that without tax credits employers would have to pay more to get people to work for them.

Why is this true? Would anyone have the option to turn down a job paying more than the minimum wage because they didn't think it paid enough? So even without tax credits the options are don't work and get no benefits (=starve?) or work for whatever the employer is offering. Thus why would not having tax credits result in fewer people being willing to work for current wages? Sure the lower waged especially those with kids would be much worse off but then it is they who are receiving an income top up not the employer who is getting a subsidy.

Note I am not arguing over whether tax credits are a good thing or not, only whether they subsidise employers.

CLAPTON

jimibaboza wrote: »

Wait a minute. They were changed to something better and yet the first thing we get on this thread is someone happily admitting to fiddling their income to keep getting their government handouts. The same thing happened when the child benefits rules were changed so it sounds to me if the law is changed then all that happens is that people then look for another loophole to exploit.

So wheeze is there in place to avoid the 40% tax rate on pension earnings? I assume there is one, otherwise these types of shenanigans is pointless.

it is true that some people are knowledgeable and rational and obey the law

michaels

jimibaboza wrote: »

Wait a minute. They were changed to something better and yet the first thing we get on this thread is someone happily admitting to fiddling their income to keep getting their government handouts. The same thing happened when the child benefits rules were changed so it sounds to me if the law is changed then all that happens is that people then look for another loophole to exploit.

So wheeze is there in place to avoid the 40% tax rate on pension earnings? I assume there is one, otherwise these types of shenanigans is pointless.

Doesn't fiddling imply something illegal which is not what this thread is about?

40% tax on pensions only applies if you earn over 40 ish k so 30k from a private pension plus 10k state pension. I would have thought that would take a much larger pot than most people could ever dream of having.

lisyloo

It's like taking money of the collection plate in church or stealing out of a charity box.

To my mind it's like taking money off the collection plate when everyone is saying "please take some, you're allowed".

gadgetmind

michaels wrote: »

I would have thought that would take a much larger pot than most people could ever dream of having.

The government have now deemed that a private pension pot can't exceed £1m, which could produce an income of around £40kpa even before SP age.

Over a 45 year working life, that's not silly given underlying investment growth.