And I really do wish the Guardian would fuck off here

Forgive us a hair-shirted headline: tax returns don’t stir a song in the heart. But in a country that cannot, allegedly, afford decent elderly care, realistic university finance, or access to justice, it is extraordinary that the only pre-budget debate is about how to reduce the fairest source of state revenues. The Tory backbench is obsessed with raising the start-point for 40% tax, which exclusively benefits the minority who earn enough to pay it. The Lib Dem counter-proposal is for a costly fresh hike in allowances. Spreading jam thinly among almost everyone in work, this was always a woeful way to compensate low-earners for cuts to housing, childcare and tax credits. Now – as the threshold rolls past the £10,000 target – an army of workers who can’t get the hours to earn that amount will see no gain at all. Besides, after the sharp VAT rise, any such cut is a giveaway that disappears the moment you try to spend it. Leave income tax alone.

Greedy fucking tosspots.

There’s nothing “fair” about charging income tax to someone working part time on minimum wage.

20 thoughts on “And I really do wish the Guardian would fuck off here”

  1. I disagree Tim. Fair is no tax, an absolute flat tax (everyone pays the same amount of money) or arguably a relative flat tax (everyone pays the same proportion of their income). But that doesn’t work, especially the first two.

    Progressive income tax is distinctly unfair. But it works. Which is why us left-wing radical liberals support it, and defend it from the predations of socialists (who effectively want to see the top rate applied to everyone, and “give back” the poor’s slice in the form they think the poor should be spending on) and other stripes of conservative.

  2. “The Tory backbench is obsessed with raising the start-point for 40% tax, which exclusively benefits the minority who earn enough to pay it.”

    And what?

    It’s our money, not the State’s, not the elderly’s, and certainly not the bloody students’.

    If the Tories were smart enough to actually do something for the sort of people who might realistically vote for them, like reduce taxes, they wouldn’t be facing the very real prospect of Prime Minister Miliband next year.

    And how much tax does the Guardian pay again?

  3. So Much For Subtlety

    As TW has pointed out any number of times, to fund the welfare state you really need a VAT. Which is, essentially, a flat tax on income. Except it does not tax any money that is saved so it is regressive – the wealthy do comparatively well off as they save more of their income.

    So if there is nothing fair about taxing the poor, the VAT must be an abomination. Which it is in my opinion. But people who love the welfare state and so love the VAT, obviously have no problems with taxing those on minimum wage – from their first penny even.

  4. @smfs

    Whilst I agree with you, food and children’s clothes are zero rated, as was domestic energy at one time, in recognition of this problem.

  5. “Spreading jam thinly among almost everyone in work, this was always a woeful way to compensate low-earners for cuts to housing, childcare and tax credits”

    For this to even begin to be an arguable position one must believe that benefits come first; tax-free income after that. And please do note, we are talking about those on low incomes, people earning the minimum wage on part time terms, as Tim points out. To run the argument you must implicitly regard citizens, particuarly the low paid, as vassals of the State.

    It actually sickens me.

  6. ‘There’s nothing “fair” about charging income tax to someone working part time on minimum wage.’ On the contrary, you could argue the whether or not it is “fair” depends on everything else involved in the way of other taxes and “benefits”.

    I’d rather argue that, as is so often the case, trying to apply the word “fair” at any level more elevated than a childish playground dispute is not going to lead to useful results.

  7. If you have a personal view of what is fair, how are you able to make a value judgement on any macro issue? Every decision affects different groups to different degrees. Unless we are prepared to form a view on these outcomes we cannot decide if we are in favour of a proposal or not.

    I want to see PAs and NIC thresholds raised because I want to see the burden of taxation removed from the low paid; simple.

  8. Allowances.

    The very name stinks. The little bit of our money they allow us to keep.

    I much prefer the Australia name “tax-free threshold”, currently $18,200 (about £10k).

    As others have said, “fair” doesn’t really come into it. Taxation by its very nature is unfair. And it’s daft to take money off people only to have to hand it back in benefits after the civil service have taken their cut.

  9. Playing devil’s advocate, one view is that the poor should pay tax to cover their implicit medical insurance, unemployment insurance, and state pension. From that perspective the real problems are that (a) contribution is compulsory, via taxation; and (b) there is only a single supplier, the state.

  10. So Much For Subtlety – sorry, I don’t get the argument that VAT is regressive. It’s a common argument that it is regressive because higher earners save more. So what? Saving is just deferred spending (unless you give it away or leave it to your children). So in years you save you are paying less VAT as a % of income. And then when you spend your savings you pay more VAT as a % of income. Now that may be regressive in a technical sense, but it’s not thereby harder on the poor than the rich.
    Or am I missing something?

  11. SimonF

    One interesting technical view of the tax implications of Scottish independence (a topic that is causing me personal and professional headaches), is that zero-rating will no longer apply to supplies in Scotland of food, children’s clothes, new homes, transport etc. The reason being that as a new applicant member of the EU, Scotland will have to use current EU VAT rules, not the historical UK rules that were allowed when the UK joined. So potentially VAT on goods that are VAT free in England and a smugglers charter.

  12. @Simon F

    ‘Whilst I agree with you, food and children’s clothes are zero rated, as was domestic energy at one time, in recognition of this problem.’

    As the father of two 13-year-old girls who are nudging 6ft in height, I have often wondered whether I’d have a case against the Inland Revenue.

    My girls wear women’s clothes, and shoes (size fucking 8), but are legally children.

    Are they being discriminated against?

    If I can shoehorn in the fact that they are female – and females grow bigger earlier – I reckon it’s a goer.

  13. @Intersted,

    My son was similar, out of children’s close by a similar age. Its been a regular issue since VAT was introduced all those years ago.

  14. “as a new applicant member of the EU, Scotland …”: what, the stupid bastards propose to apply for EU membership? Dear God, and they have the cheek to prattle about independence.

  15. @ Andrew M The poor should pay a nominal amount of tax for the simple reason that it makes them realise that when they argue for higher taxes, they know it will hit their pocket too.
    As it stands, the coalition are creating an incentive structure whereby half the population are paying so little tax that they will always vote for the populist idiot who campaigns on the basis of tax and spend.

  16. Surreptitious Evil

    The reason being that as a new applicant member of the EU, Scotland will have to use current EU VAT rules, not the historical UK rules that were allowed when the UK joined.

    So much of Wee Eck’s rational for independence is fundamentally dependant on you being utterly and totally wrong in both principle and practice.

    Schengen. Keeping the pound. UK opt outs on ECHR extensions, the Working Time Directive (this has probably been obe) etc.

  17. @ Interested
    The regulations specify “children’s clothes” not clothes for children”. You should be able to demand their school uniform be zero-rated but if you buy women’s clothes they are standard-rated whoever wears them.
    Conversely when I was in my thirties, my tailor (I was better-off* in those days) told me to buy casual trousers from the youth’s department of C&A or John Lewis and he would take them in for me as the cost of made-to-measure casual trousers was more than they were worth (and the fashion at the time was for adult trousers to fit fat guys so that he could not adapt those without them looking weird).
    *and slimmer

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