Polly on the living wage

The IFS says the Treasury gains £1,000 in tax and saved credits for each living wage worker. Why should the taxpayer subsidise Scrooge employers?

This is what so angers me about these bastards.

They\’re running around arguing that these are poverty wages, there merest minimum that anyone at all should get.

Then they\’re celebrating how much tax they can raise by stealing the bread form the mouths of poor children.

Have these people no fucking shame?

15 thoughts on “Polly on the living wage”

  1. It is not serious policy debate. It is political posturing of the cheapest kind.

    You don’t care.
    I do.

    That’s it.

    What I can’t understand is why the tax free limit isn’t raised as Tim is insisting. Or instigate a rate of 1p in the £ if you want the wages really inside the system and for people to know that taxes exist.

    My option would not be to adjust the tax take upwards (via rates or moving bands around), but that option is available to big-statists. So you could make it tax take neutral.

    I see no ideological reason not to support it from the mainstream left or right, but it doesn’t even seem to be on the table.

  2. @ bilbaoboy

    The reason it’s not on the table with the maintream left is that they want someone else to pay for it. There is this wonderful fantasy whereby low-end wages rise, and it’s all at the expense of big nasty companies owned by the super rich.. all domiciled in the Taxfree Republic of Narnia.

    Also, raising the personal allowance in the direction required is already in progress. It’s a LibDem policy, being implemented by a Tory-led government. As such, Polly (et al) have been sniping and picking holes in it all along, and so can hardly now hold it up as the way forward.

    Where the mainstream right don’t support it, I presume it’s because they just think that people should be able to adjust their living standards and live perfectly adequately on what they get? So there’s no problem to be solved.

  3. There is this wonderful fantasy whereby low-end wages rise, and it’s all at the expense of big nasty companies owned by the super rich.. all domiciled in the Taxfree Republic of Narnia.

    That’s true. There are fewer forums containing more demented lefty nonsense than that of the British Rugby League fansites, and the denizens there seem to think the *only* thing wrong with the nation’s finances is that corporation tax isn’t being paid as it should be. Collect that tax, they think, and any number of policies will instantly become affordable.

  4. “What I can’t understand is why the tax free limit isn’t raised as Tim is insisting.”

    It was raised in Britain, but to prevent a bigger benefit to “higher-rate” taxpayers, the threshold at which that rate starts was lowered proportionately, dragging many more people on still fairly modest incomes (esp. for the South-East) into the higher-rate 40% band, which makes them subject to a range of additional measures.

    Basic rate is 20% in Britain, so there’s an amazing doubling of the rate at a single point. Furthermore, I’ve ignored National Insurance, which adds an extra twist. Of the knife.

  5. Also, what constitutes a minimum “nice” wage will vary round the country.

    Note that “Why should the taxpayer subsidise Scrooge employers?” applies the new approach that turns any failure to collect tax into a “subsidy by the taxpayer” (eg, tax reliefs, legitimate expenses, and many more).

  6. The reason some mainstream lefties who aren’t solely ignorant (yes, they do exist, shut up) oppose it are threefold, in descending order of merit.

    1) compared to policies that directly benefit the poor, like tax credits, the major beneficiaries of tax allowance rises are middle-income earners, because everyone gets the tax-free bit.

    1a) you *could* combine the policy with corresponding rises in middle and high rates (Australia did this under Hawke; it now has a very fine income tax system indeed), but that would actively piss off middle income earners more than doing nothing and bringing in tax credits for low earners, so requires politicians with some balls.

    2) it’s a Coalition policy, so oppose it. Shitty behaviour; completely normal politics that all sides are guilty of; one of main reasons why only scumbags tend to stand for parliament in a tightly whipped political system (oddly, with the exception of Australia for 25 years at the end of the last century).

  7. CHF: ignoring National Insurance undermines your argument – taking it into account, when you reach the UK higher-rate band, your marginal tax rate nowhere near doubles.

    (also, average earnings are gbp26k. So no, gbp42 isn’t a modest income. Yes perhaps stay-at-home-mums should get to contribute their allowances, but for a single or a dual-earning couple, 42k/84k are not modest and it’s insane to suggest they are).

  8. JohnB,

    I would have thought that the major beneficiaries would be those on the minimum wage who would not pay any tax at all. The middle income people benefit a little, but not as much in terms of how it affects the money they have their in pocket. Middle income people will still be paying tax even with a raised tax allowance. Just because lefties don’t want the middle to benefit in anyway, they will keep the poor poor. Tax credits is just a stupid money-go-round keeping civil servants in a job. Why not just not take it in the first place.

  9. Besides the fact that tax allowance changes make no difference to those whose income is below that tax threshold? The last couple of allowance increases made no net difference to our household income.
    Most of the jobs I’m going for it would make no difference on.

  10. Minimum wage folks with families wouldn’t benefit much from a personal allowance increase, under the assumption that the calculations for working tax credit and so on are based on post-tax rather than pre-tax income.

    Single minimum-wage folks would benefit, and moderate-income folks of most stripes would benefit. Presumably you adjust the threshold for the top tax band to make it have no net effect on the well-off.

    (Personally, I’m all in favour of transferrable personal allowances, because my wife stays home with the children. I don’t know whether it would be good policy or not, though.)

  11. I would have thought that the major beneficiaries would be those on the minimum wage who would not pay any tax at all.

    Well, no.

    Andy is a part-time worker on the minimum wage. He pays GBP500 in tax.

    Bob is a full-time worker on the average wage. He pays GBP3k in tax.

    (figures pulled-from-arse but ballpark right).

    Raising the tax-free threshold to the minimum wage would involve Andy taking home an extra GBP500, while Bob took home an extra GBP1000.

  12. I cant really agree with the idea Australia has a fine tax system. When just about everyone uses an accountant to do their tax return, I suspect there are some serious flaws to be ironned out.

    Thats without getting into the antics of the ATO from time to time either.

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