IPPR: Twats

This sort of thing does really annoy me.

The Liberal Democrats\’ flagship idea of raising the tax threshold to £12,500 would benefit the wealthy more than the poor, according to a respected leftwing thinktank.

The government is already committed to slowly increasing the threshold to £10,000, but Danny Alexander, the Lib Dem chief secretary to the Treasury, says the further move would take millions out of tax and provide an incentive for low earners.

But a new report from the Institute of Public Policy Research claims that the policy, while ensuring that people who work 40 hours a week on a minimum wage will no longer pay tax, actually benefits the richest half of the country more than the worst off.

It is claimed millions of pensioners and people in part-time work would not feel any benefit because their income is so low. Overall, around a quarter of adults live in households where nobody earns enough to pay tax. It is further claimed the poorest 10% of the country would benefit on average by just £1 a week.

Look, will you please just fuck off, this is a moral issue.

We have this thing called the minimum wage. Perhaps we should and perhaps we shouldn\’t but we do. And the argument is that it is immoral to allow anyone to sell their labour for less than this sum.

Whether we should or we shouldn\’t have this, we do.

Good, excellent, well, the flip side of this is that you don\’t get to dip the State\’s hands into those pockets which are earning this morally justified minimum sum.

No, not for defence, Sure Start centres, funding idiot think tanks, not even to pay for the majesty of the Queen\’s Justice. You are the people who have said this is a moral issue: live by your own morals.

Yes, we can go around the houses on the economic details: the poor face higher marginal tax rates than anyone else in this country which is simply idiotic and yes, this would be a partial solution. We can very easily tax back by a change in the basic rate (or even higher rate) the benefit this threshold raising provides to upper income households. It is gargantually absurd to be taxing people working part time on the minimum wage then giving exactly the same people tax credits.

But all of these things are outweighed by the simple moral point that you, cuntybollocks that you are, are making over the minimum wage.

If there is, for moral reasons, a minimum amount that people must earn then you don\’t get to tax that minimum amount.

And if that doesn\’t convince you well, try this.

How in God\’s Name did we get to where a left wing think tank is contorting itself into opposing a tax cut on the poor?

What?

10 thoughts on “IPPR: Twats”

  1. It is the perfect illustration of Dan Hannan’s parable:

    “Suppose that every day, ten men went to the pub, and drank exactly £100 worth of ale among them. If they paid their bill the way we pay our taxes, the breakdown would be roughly as follows:

    The first four men (the poorest) would pay nothing.

    The fifth would pay £1.

    The sixth would pay £3.

    The seventh would pay £7.

    The eighth would pay £12.

    The ninth would pay £18.

    The tenth man (the richest) would pay £59.

    So, that’s what they decided to do.

    The ten men drank contentedly together in the saloon bar until the landlord, meaning to be helpful, presented them with a dilemma.

    “Gentlemen,” he said, “you’re my best customers. To show you how much I appreciate your trade, I’d like to give you a discount. From now on, I’ll knock £20 of the total bill for your drinks”. Drinks for the ten men would now cost just £80.

    The group wanted to carry on splitting their bill in the way that we pay our taxes. So, obviously, the first four men, those least well off, would continue to enjoy free beer. What, though, of the other six? How could they divide the £20 discount in such a way that everyone got his fair share of the windfall?

    They realised that £20 divided by six is £3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink.

    So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, following the principle of the tax system they had been using. This is how the bill now looked.

    The fifth man, like the first four, now paid nothing (100 per cent saving).

    The sixth now paid £2 instead of £3 (33 per cent saving).

    The seventh now paid £5 instead of £7 (28 per cent saving).

    The eighth now paid £9 instead of £12 (25 per cent saving).

    The ninth now paid £14 instead of £18 (22 per cent saving).

    The tenth now paid £49 instead of £59 (16 per cent saving).

    Each of the six was better off than before. And the first four continued to enjoy free booze. But, as they left the pub, the men began to compare their savings.

    “I only got a pound out of the £20 saving,” declared the sixth man. He jabbed an accusing finger at the tenth man,”Why should he get £10?”

    “Too right,” exclaimed the fifth man. “I only saved a pound too. It’s unfair that he got ten times more benefit than me!”

    “That’s true!” shouted the seventh man. “Why should he get £10 back, when I got two measly quid? The system is rigged in favour of the toffs!”

    “Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. It’s always the worst off who get neglected by the politicians!”

    The nine men dragged the tenth into the carpark and gave him a thorough kicking.

    The next night the tenth man didn’t show up for drinks, so the nine sat down and had their beer without him. But when the bill came, they found that their money didn’t even cover half of it.”

    For me the moral of the story is that some people just don’t know when they are winning, and will sabotage themselves to make sure The Other loses even if the cost to themself is greater, ‘cos they didn’t know how much they had to lose because they didn’t even know they were winning.

    http://blogs.telegraph.co.uk/news/danielhannan/100022697/why-tax-cuts-are-bound-to-favour-the-rich/

  2. No, Hannan’s parable is bollocks based on the nonsense view that only high-income people generate wealth.

    Tim’s point, on the other hand, isn’t: taxing the poor is Just Stupid. Although income tax is pretty much irrelevant, particularly for part-timers – this is yet another reason to abolish NI, roll it into income tax, charge it on the same pro-rata basis as income tax, and make it totally clear how insanely high the overall taxation on low income workers actually is (unlike high-income workers, for whom NI is capped at 1%).

  3. Proof, if ever any were needed, that the Left are prepared to refuse to help the poor, if it also helps someone richer also. They don’t actually care about the poor at all, they just want to be vindictive to the rich. This can be seen throughout the State sector, where the poorest sections of society suffer the most from pretty much all Left wing ideas – comprehensive education, the NHS, mass immigration, being soft on crime, the mass expansion of the welfare state.

    But they mean so well, so it doesn’t matter……

  4. Can’t say your moral argument on this has much going for it, Tim, because you’re ignoring the notion of democracy & universal suffrage.
    Everyone’s got a vote & in voting is expressing an opinion on the balance between spending & the tax that pays for it. Take the tax element away & then don’t be surprised if those who don’t pay tax consistently vote for higher spending & higher taxes. Taxing those on minimum wage then giving them tax credits to pay the tax may be messy but at least it avoids the greater moral hazard.
    All in all, a better solution might be to pay everyone a basic living allowance then tax everyone on their full income including the allowance, no threshold whatsoever. Also extremely cheap to administer.
    It’d help if we started thinking of tax as simply how we pay for the services the state provides & not as some sort of quasi religious penance for having the temerity to be productive & create wealth.

  5. What I’ve never understood about tax arguments – and economics in general – is that the entire mechanism of debate is mathematical. As Descartes knew so well, mathematics is indefatigable in its operations, and has genuinely right and wrong outcomes. Why, then, is one of the arguments you gents are debating not demonstrably correct?

  6. Read the comments below the article. When even the CiF pack attack an IPPR article for being economically illiterate and distorted you know it really was written on bog-paper. The IPPR has really shot itself in the foot with that one.

  7. This isn’t about tax, it’s about benefits, isn’t it. Raising the tax threshold doesn’t benefit anyone who is already earning too little to pay tax. So presumably IPPR would like the government to pay more in benefits to the very poorest rather than cutting taxes for the slightly less poor. Presumably, when the benefits to the very poorest reach the level of income that the slightly less poor have, they will be taxed on them. The sheer illogicality of this is breathtaking.

  8. Ian [email protected]

    “Hannan’s parable is bollocks based on the nonsense view that only high-income people generate wealth”.

    Really? Agreed the others in the parable and in real life may have generated wealth but failed to appropriate much of it, but Hannan is silent on that, and I’m not sure how that changes the point, which is that when tax is paid disproportionately by those who *do* acrue wealth (which may or may not be those who generate wealth), then most tax cuts are likely to benefit those who currently pay tax i.e. the wealthly.

    When those who have acrued less wealth realise how much the tax cuts benefit those who have acrued wealth, they are in effect seeing a symptom of the fact that our tax system is deeply progressive already, although they have often failed to realise/acknowledge that.

  9. john_b’s bollocks as usual. You are simply not willing to understand the parable. There’s plenty of empirical research that shows demonstrates just how accurate the parable is, in some studies a majority of people will consent to being poorer personally just so that someone else cannot be significantly wealthier. That is, they’re quite prepared, to use an older saying, to cut off their noses to spite their faces.

    And to rub it in, the parable says nothing about generating wealth, but does point out very accurately that a small proportion of people pay an majority of the direct income taxes. And, these aren’t the truly wealthy, who rarely pay significant taxes personally at all, having accountants and tax lawyers employed en masse to ensure that they don’t.

  10. The parable is due to William F. Buckley originally. It’s essentially encapsulating a truism, which is that if you cut taxes, the people who pay most tax get the biggest (absolute) cut.

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