@RichardJMurphy shows how cheap it will be to take the poor out of income tax

I doubt that this is what he means to do but here are his figures:

In fact, the bottom 25% of earners pay just 2.3% of all income tax between them right now, and the bottom 10% just 0.4%.

Excellent. So it will be piss easy to take those working poor out of the income tax net because we’re not getting much money from them anyway. 2.3% is around and about the sort of efficiency saving that any private business would be looking for in any one year. So, as I say, piss easy to do, just raise the income tax allowance to the minimum wage. It’s going to be very cheap indeed to wipe away that moral stain that we tax the poor to pay the Miliboy’s wages.

Otherwise cut the taxes that impact the poorest more, like national insurance – See more at:

Quite, as we also argue: raise the national insurance limit to the minimum wage as well.

Good to have you on board Ritchie!

12 comments on “@RichardJMurphy shows how cheap it will be to take the poor out of income tax

  1. Um, if you raise the income tax allowance to the minimum wage, then you lower the amount of income tax paid by everyone (or, at least, everyone whose marginal tax-rate is the basic rate).

    The same applies to the primary threshold of NI. Please note, it’s called the primary threshold; the earnings limit is the number you need to earn to qualify for class 1 stamps; you don’t want to raise that because that would create pensions havoc.

    Unless you raise the basic rate of income tax and/or NI, raising the personal allowance and/or primary threshold lowers tax for everyone in the basic band, which is the majority of all earners, not just the bottom few.

  2. His chart shows us that the top decile pay 53.5% of all tax. And the chart immediately above that tells us that the top decile earn 33.7% of all income.

  3. Credit where it’s due.. although he can’t bring himself to admit that the current government have taken hefty steps in the right direction on this front, at least his response isn’t some bullshit about how we have to tax the incomes of the poor to make them feel like society loves them.

  4. The poor should have a stake in the government’s profligacy. Tax ’em.

    An egalitarian government should not differentiate people as “poor” or “rich,” anyway.

  5. @Gamecock: the poor still have to pay VAT, council tax, alcohol and tobacco duty, TV licence, etc so I think the “stake” issue is taken care of.

  6. MattyJ, I believe taxes should be general, and be levied in equal amounts or equal rates. That the “poor” pay other taxes has no bearing on income tax. Tax everybody. At the same rate. Government treating people differently under the law necessarily leads to mischief, as well as simply being immoral.

  7. Let’s take a look at what happens when the poor are asked to explicitly contribute to the tax base.

    Since April this year, a number of local authorities no longer top up council tax benefit. For example in Southwark, households on benefit are being asked to contribute around £2 a week to their local council’s coffers. Judging by the look of the 5,000 or so people who were summonsed to court for non-payment, the very poor are viscerally opposed to paying tax.

  8. But but but but if the poor don’t pay tax then they will no long be fully dependent members of a client state won’t feel like they are proper members of society and they won’t slavishly vote labour that’s evil discrimination!

  9. Currently a single person earning between £9,440 and £13,000 is simultaneously paying income tax and receiving working tax credit because the (previous) government thinks their income is too low. [For couples they measure the joint income and the cut-off point for working tax credit is a bit over £17k]
    The Brian Rix sort of Whitehall farces never appealed to me but this farce is far worse. Why? Because these unfortunate people have a marginal tax rate of 73% and are criminalised if they make a mistake filling in the appallingly-designed forms.
    It is immoral to levy income tax on those so poor as to need state subsidies. Either raise the threshold for income tax or lower it for subsidies (“welfare payments”) – preferably both.

  10. John77

    Agreed – and I know you’ll have the numbers right!

    I would just point out that people a good way below Ritchie’s precious living Wage (which of course is PRE-TAX) are currently paying tax. Since he regards anyone below this as desparately poor, it follows that raising PAs does – must! – be “helping the poorest with their tax bills”.

    Now I know Ritchie is fond of caling us stupid for relying on his titles and not the crux of his arguments – which can be a moving feast as the comments get going –

  11. I see people are trying to get Ritchie pinned down on who he considers the wealthiest in society are and he’s come up with the definition that “wealthiest means capacity to pay”. I’m tempted to ask who he considers has the capacity to pay but I’m sure he’d reply “the wealthiest”.

  12. China: “Theory and practice prove that the market is the most efficient way to allocate resources” – this sentence from the Third Plenum’s decision document could augur and encapsulate the next several decades of China’s development.

    Wonder if RM agrees with that?

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