I’m afraid this is a moral issue Polly: and you’re on the wrong side here

Clegg first. He pretends that raising income tax thresholds helps the poor most when he knows that of the many billions already spent on this, three-quarters has gone to the upper, not the lower half of earners. He is bidding for another £1bn for raising personal tax allowances that will do virtually nothing for the bottom 30% of earners. He claims this would put £100 on the “average” pay, but the tyranny of averages is makes that misleading. As the Institute for Fiscal Studies (IFS) points out, tax credits and benefits are what most affect the bottom fifth of households, not tax rates. If Clegg sincerely wanted to help the poor, he’d raise their pay or their credits.

I’m afraid that you’re not quite understanding the argument here. It’s one more of morals than anything else.

The State, in its infinite wisdom, declares that there is sum amount of money which is the least amount that can justly be paid for an hour of someone’s time. Leave aside whether it should or not, it does.

Said State then dips its sticky fingers into the pay packets of those who work, even only part time, on this justly determined minimum amount. The working poor are fleeced to pay the Miliboy’s salary and for the job ads in The Guardian that pay Polly’s.

I, along with some others, regard this as immoral. If there is some just amount that no one should earn less than then there is that just amount which someone should earn. Without the upper middle classes that produce our rulers getting a cut of it.

Therefore, and solely therefore, the personal allowance for both income tax and both types of national insurance should be the same as the full year full time minimum wage. With no ifs or buts.

It’s worth noting that this would reduce tax credits paid out, it would make the current minimum wage, post tax, within pennies per hour of the current Living Wage, post tax, it would reduce the appallingly high marginal tax and benefit withdrawal rates that many working poor face. It might also be necessary to rejig other parts of the tax system to compensate for this as well.

But it is, at heart, entirely a moral campaign.

If the government determines that there is a minimum just wage then that government doesn’t get to nick part of that just minimum wage.

Finis.

21 comments on “I’m afraid this is a moral issue Polly: and you’re on the wrong side here

  1. “of the many billions already spent on this, three-quarters has gone to the upper, not the lower half of earners.”

    Nothing has been “spent” on this. It’s merely meant people paying less tax. In Toynbee’s world, people not giving the state money is the same as the state subsiding people. All money belongs to the state, we just get to hold some of it for a while.

    “He is bidding for another £1bn for raising personal tax allowances that will do virtually nothing for the bottom 30% of earners.”

    Bollocks. Most earners – and ALL fulltime earners – in the bottom 30% will benefit. Toynbee is, I think, referring to the bottom three income deciles (and even so I suspect is still wrong) – very large numbers of people in these deciles are not “earners” but welfare recipients.

  2. “that will do virtually nothing for the bottom 30% of earners”

    Polly has been reading her Richard Murphy and is echoing him virtually word for word.

    My objection is twofold:

    1. Just doing the basic sums, it’s complete bollocks. Letting you keep everything you earn rather than taking up to 30% out (incl NIC) is not “nothing”.
    2. How Middle Class, how patronising, how out of touch, how fucking disgusting! Ritchie sneers “they don’t pay much tax anyway, so it will have no effect”. he then shows a pie chart – so much for economics as a moral philosophy eh – which he misrepresents (deliberate or just a fuckwit?) but which actually shows the poor don’t pay as much as millionaires. So fucking what?

    Because you comfortable middle class gits don’t get it let me explain: the bottom 30% don’t live on Norfolk’s ‘Gold Coast’ and they don’t have second homes in Tuscany. Every penny, every pecentage of earnings matters to them. If we raise the threshold we put pounds in their pocket. That may be “virtually nothing” to you pair of smug comfortable scroungers; it isn’t to others.

    “tax credits and benefits are what most affect the bottom fifth of households”. That would be right. We can’t have them keeping their own money can we; must have them holding their hands out to us.

    You pretend to care about the poor. In fact all you care about is that Labour victory. And you realise that Nick Clegg has just kicked the last reason for voting for Ed right out from under his feet. So you’ll scream as loud as you can and just plain lie about it won’t you.

  3. In Pollyland it’s more sensible to take £100 from a poor person, and pay a richer person £10 to decide that that the original poor person should get £100 (or much, much less) returned to them, rather than leave them the f**k alone.

    But when Polly’s reader’s jobs are dependent on managing the millions of £10s, I suppose it’s understandable she doesn’t want it to stop.

  4. “I’m afraid that you’re not quite understanding the argument here. It’s one more of morals than anything else.”

    Whose morals? Is it libertarian policy that tax policy should be based on morals?

  5. I’d like to see a ‘fact check’ on the statement that ¾ of the benefit went to the ‘upper half’ of earners. That sounds bogus.

    1. Higher rate taxpayers don’t benefit at all, as the higher rate band has been lowered to compensate.
    2. The Graun has told me that 4m out of 24m taxpayers are higher rate. This means that 8m people must be getting ¾ of the benefit of the raised allowance, and 12m people are sharing the other ¼.
    3. The benefit of a raised allowance goes, 100%, to anyone earning above the new allowance. It’s not ‘proportional’ (as would be a basic rate cut) so that someone on £25k gets more benefit than someone on £15k. They get exactly the same benefit.
    4. So if we ignore the people in between the bands who benefit partially and say that everyone either gets it all or gets none, Polly is telling me that 8m people (who, obviously, must all get the benefit) get ¾ of the benefit, meaning that only about 2.7m of the remaining 12m of taxpayers earn enough to get the benefit. Or, to put it another way, 9.3m people (39% of taxpayers) earn below £9.5k.

    That seems a lot… is it just that she’s including pensioners?

  6. “The working poor are fleeced to pay the Miliboy’s salary and for the job ads in The Guardian that pay Polly’s.” Good dig, Tim.

    “I … regard this as immoral.” Wrong adjective, I’d say. Ill-advised, wrong-headed, even disgraceful if you like, but surely “immoral” is a Grauniad-like expostulation?

  7. “Said State then dips its sticky fingers into the pay packets of those who work, even only part time…”

    Err, not necessarily. A part-timer working 30 hours a week for 48 weeks a year at minimum wage (£6.31) will have a gross income of £9,086. This is below the threshold for income tax at £9,440.

    National Insurance is a separate issue. If you consider NI as payment for services received (health insurance, pension contributions) then you can just ignore it. If you consider NI as another layer of income tax, then it kicks in at £5,668 (employers’) and £7,696 (employees’). A school dinner lady, working 5 hours per day x 5 days per week x 36 weeks a year will be below both thresholds.

    Source: http://www.hmrc.gov.uk/payerti/forms-updates/rates-thresholds.htm

  8. Stuck-Record, so Polly wants a rich person paid £10 to take £100 off a poor person in tax and then decide that the poor person gets £100 in benefits. I bet she thinks that £10 for the rich person comes from the magic money tree.

  9. “The working poor are fleeced to pay the Miliboy’s salary…”

    Am I the only one who finds it odd that of all the things David Cameron’s government is spending money on, Tim repeatedly singles out the leader of the Opposition’s salary as his bugbear? What about Cameron’s salary? Osborne’s? Clegg’s?

  10. Tim’s overcomplicating.

    Taxing the poor is evil.

    Anyone who doesn’t automatically understand that to be true has no place talking about the poor.

  11. SadButMadLad

    Quite. But in reality the waste is probably much worse.

    Even if done efficiently the process would be pointless and wasteful. Experience shows that Govt doesn’t do efficient.

  12. Look, let’s get back to basics:

    The argument being propogated by Polly/Ritchie is that this proposal does nothing to help the poor. It does! Anyone who claims it doesn’t is telling lies for political purposes.

  13. Christopher Snowden has this correct. In Pollyworld those people who are in receipt of benefits and do not work included in her calculations as to who benefits from a tax cut. Thus in her world its obvious that tax cuts are evil because they aren’t helping those who don’t work.

    It is the ultimate example of the ‘all your money belongs to us’ mentality – there is a complete moral equivalence between those who work for their income and those who get it for free from others. In Pollyworld the State ‘allows’ you to have some income, whether you worked for it or not, and there is no distinction drawn between the two classes, so any policy change that only affects those working is ‘unfair’. Or ‘neoliberal fascism’ as they prefer to call it.

  14. I’d like to see a ‘fact check’ on the statement that ¾ of the benefit went to the ‘upper half’ of earners

    You make the mistake of presuming that arithmetic rather than assumption has been used in deriving Polly’s figures.

  15. I think the Treasury are well aware that National insurance and Income tax have an impact on the minimum wage and so they are part of the cost of living expenses taking into account when determining what is appropriate for the minimum wage.
    Also unless someone earns the minimum wage by coincidence rather than legislation then reducing employers NI would not increase the wage, as it is determined by legislation.

  16. Or to put it another way the Sate may infact agree with the proposition

    ” ….that there is some amount of money which is the least amount that can justly be paid for an hour of someone’s time…”,
    but declare that level once tax is added.

  17. Dinero,

    That you think it and repeatedly state it doesn’t make it any truer.

    Although it’s nice to hear you refer to tax as “part of the cost of living expenses”.

  18. putting it consisely – what ever the minimum figure is, either earnt or payed, is it can be stated after tax is added

  19. Dinero,

    So why is this “appropriate” after-tax amount never quoted by campaigners? Why do they always refer to the pre-tax amount?

    Are they not privy to the thoughtful calculation the Government has performed?

  20. Andrew M

    “If you consider NI as another layer of income tax, then it kicks in at £5,668 (employers’) and £7,696 (employees’)”.

    No.

    £5,668 is the Lower Earnings Limit. This is the amount of earnings above which you get credit for a NI contribution year (even though you don’t pay any NI). £7,696 is the secondary threshold. This is the amount of earnings above which employer’s (not employee’s) NI is payable.

    The primary threshold is £7,755 and this is the amount of earnings above which employee’s NI is due.

    If someone is earning (say) £7,500 p.a. there will be no NI (employer’s or employee’s) due but the worker will be treated as having paid NI for contributory benefits purposes (e.g. the state pension).

    Yes, that’s right, you can contribute nothing at all and still earn a state pension.

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