Timmy Elsewhere

At the Business.

These are from yesterday, some glitch in the software means they were delayed going up.

His Noodliness, the most important story in yesterday\’s papers and marginal tax rates on the poor.

4 thoughts on “Timmy Elsewhere”

  1. That’s the other Big Misunderstanding, that your solutions to the problem (increase personal allowance and/or reduce taper rate) would not be eye-wateringly expensive. A CBI at £60 per week (current IS/JSA rates) to replace all working age benefits for all low- or non-earners, and doubling the personal allowance for everybody else, would, at a pinch (and assuming a bit of Laffer effects, a few billion administrative cost savings etc) not involve an increase in basic rate of tax.

    Further, the 90% rate hits low earners far harder than millionaires. It’s still worth going to work for £1m gross a year even if you pay 90% tax. It’s not worth going to work for £10,000 a year if you pay 90% tax.

  2. I would be very much in favour of a significant rise in the threshold, and taking the lower paid out of the tax system altogether. When the treasury taxes these folk, and gives them their money back in benefits, it just creates a mass of clients who feel (wrongly) dependant on government handouts.
    But I would also want to see a massive cutback in the army of clerks who are administering the system.

  3. I would go further in raising thresholds but taking you figures of needing to find savings of £60bn it should be easy as we would be creating a virtuous circle:

    Those incentivised to work would, eventually, start generating wealth.

    Which such a high level (or MW’s CBI) we could significantly simplify tax, especially WTC’s. This would have a double benefit:

    Firstly companies wouldn’t need to waste resources working out who is entitled to WTC’s they could either invest it, pay higher wages or higher dividends, all of which generate taxes and create more wealth, either directly of indirectly.

    Also, my favourite, a simplified system means we wouldn’t need so many bright people to administer the system. They could then be released from the tedium of being civil servants, saving money, and turn their intelligence towards wealth creation.

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