We\’re ruled by idiots.

OK, so we have a tax credit system to aid the poor. Yes, it\’s a little too complex and so on but it\’s not on the face of it an entirely insane idea.

…reducing the upper limit at which families are eligible for tax credits, from £50,000 to £40,000.

But that is an insane idea. That those who pay higher rate income tax are included in the tax credit scheme to aid the poor.

Can we ask the adults to come back and run the country please?

8 thoughts on “We\’re ruled by idiots.”

  1. I knew it was stupid and I still applied for it.
    For an evening’s form-filling, for the two of us, we received £500, per year.
    The corruption is in the concept: that the government can decide what you need and make everyone give you a little. Based on the total income – not whether you spend your existing income sensibly.
    If it was designed to turn us all into supplicants of the state, that is what it did. Was that its purpose? Maybe . . .

  2. So Much For Subtlety

    The problem is that you have to apply for it. They take so much of my money that I need to get every penny I can back. Now I don’t get this or anything else, but if I was earning 40,000 a year and could claim it, I would.

    The system has become one that takes from the honest and those too lazy to get to grips with the tax system and gives it to the spivs and shameless. Which is to say, from the decent if slow people of all classes.

  3. Making forty grand a year and you qualify for charity?

    It’s worse than that; you get Child Benefit at any level of income. And (linking to another thread) you get higher-rate tax relief on your pension – what’s that, in this day and age, if not charity, and a transfer of wealth from lower-paid to higher-paid?

  4. Clegg is stupid.

    If you adjust the taper rate for tax credits so that households on £40k don’t get it, this increases the marginal withdrawal rate on low and average earners even more.

    Anyway, tax credits ought to be scrapped and replaced with a combination of more generous flat rate Chold Benefit (about £30 a week); a personal allowance of £10,000; and a reduction in the income-related benefit withdrawal rate to the basic rate of tax plus NI and so on.

    There’s no real difference between a flat rate child benefit and a transferable personal allowance for children, which of necessity would benefit higher earners more, unless you had a flat rate tax system in the first place.

    It’s all in the MW manifesto.

  5. “It’s worse than that; you get Child Benefit at any level of income.”

    No, tax credits are much worse. Child benefit barely costs anything to administer: “do you have a child (y/n)”, so the fact that you’re transferring some people money that you’ve already taxed off them doesn’t matter all that much. But tax credits involve significant amounts of work by HMRC and the individual, hence greater deadweight loss.

  6. Ah yes…. I take your point entirely, john b, and would make the same argument about higher-rate tax relief on pension contributions. What I was getting at ( sloppily perhaps) was the £40,000 ceiling causing amazement (actually I thought it was over £50k for some couples, but there we go).

    Blanket coverage of benefits was, I’m sure, all very well in the social conditions pertaining when CB was launched, but in this day and age it has to be questioned.

    Good paper linked to here:

    http://econpapers.repec.org/paper/wrkwarwec/749.htm

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