Oh dear God Polly

Let’s look at the smaller frauds in this budget. Osborne will announce more of the low-paid to be lifted out of tax: that sounds so admirable that the former Lib Dem minister Chris Huhne, writing in the Guardian, quarrelled with Osborne over which coalition party deserves the credit for what they both know is a synthetic policy. As Resolution Foundation research shows, 5 million of the low-paid get not a penny more. Only 10% of the high cost of this policy goes to lifting anyone out of income tax. Only 15% of the money goes to anyone earning less that the £26,000 median, the rest all goes up the scale to above-average earners. Universal Credit sees every penny of a tax cut taken away in lower credits. National insurance kicks in at £8,000 and is more regressive, yet Clegg wants the tax threshold raised yet more, positioning the coalition as egalitarians. The staggeringly reckless cost is £11bn a year: if genuinely spent on low-income families, it might have avoided the extra 700,000 children descending into absolute poverty that the IFS predicts by next year.

Ex-chancellors Lawson and Lamont join the Daily Mail in protesting against raising the personal tax allowance on the lower paid – but not for the right reasons. They want the “middle classes” on £41,866 to be saved from being dragged into the 40p tax bracket. We must presume ex-chancellors are not innumerate, in which case they must know what they say is balderdash. Those recently pulled into paying 40% are still gaining more through the rise in their personal tax allowance than they lose from paying 40p on the top small slice of their earnings.


But the point
of the two tax changes together is to lift some of the burden of taxation on the low paid and put it instead on the shoulders of the well paid. That’s what the lowering of the 40p rate (through fiscal grad) and the raising of the personal allowance (to compensate for past fiscal drag) is all about. It’s actually a unified and deliberate policy.

It’s entirely possible to disagree with it, fer sure, but do try to realise that it is indeed planned.

18 thoughts on “Oh dear God Polly”

  1. Polly will always behave like Polly. Cannot do the maths, cannot accept that someone else with different views can be right and cannot accept that a policy by a non-labour government can help people.
    I do happen to agree about the raising of the income tax allowance not helping the poorest – however is that the intention? I would say it helps a majority of people!

  2. “…if genuinely spent on low-income families, it might have avoided the extra 700,000 children descending into absolute poverty that the IFS predicts by next year.”

    An extra 700,000 children descending into ABSOLUTE poverty you say? In the UK you say?

    Really?

  3. “Only 15% of the money goes to anyone earning less that the £26,000 median, the rest all goes up the scale to above-average earners.”

    Given that nobody, NOBODY, will gain by more than 20% on the increase, this means that about 41.1% of adults pay no income tax at all. Straight up question: is that right?

  4. Could be right, yes. Pensioners on basic pension alone won’t pay income tax, those on income support, jobseekers allowance and ESA probably won’t pay income tax. Most students won’t be liable for income tax. Add in those workers who work part time or are on low self employed profits…..
    So yes, a good chunk of the adult population won’t pay income tax.

  5. Martin

    And that’s fine as far as I’m concerned.

    It doesn’t change the fact that Polly (and of course Murphy before her) is running a false argument. The flat advantage is worth a lot more to those at the lower end of the scale than those higher up. And if you’re not paying tax then the raised PA will not cost you anything in lost benefits, which is the argument that Ed balls tried to run at the weekend.

    No, this is an unqualified good thing. I am not in the least bit surprised that the usual suspects have been arguing against it for the past few weeks. They see how popular it will be, how damaging for them. It follows that despite all their protests they actually have no interest in those on lower incomes.

  6. For Polly et al to see sense they’d have to accept that if the government, out of the kindness of its egalitarian heart, decides not to forcibly extract money by threat of violence, this is not really a “gain” as such.

  7. Ironman, as a non income tax payer, I agree with you.
    No benefit to me with a raising of tax allowance.

  8. DK
    Isn’t there a personal allowance to be included in these calculations of 9440 for 2013-14?

  9. “Since the 40% higher tax rate kicks in when you earn a mere £32,011″…

    …on top of your personal allowance of £9,440 for 2013/14, giving total income of £41,451…

    Or, in 2014/15 money: £31,866 on top of your allowance of £10,000, making income of £41,866… 🙂

  10. Bloke in Costa Rica

    I wonder if Toynbee re-reads her stuff once she’s written it or whether it’s fire-and-forget. At a rough estimate there’s 30 million children in the UK. And she is claiming that the number of them that are living in absolute poverty is going to increase by 2.5% next year from some presumably non-zero number? And I suppose we should assume that for every child in absolute poverty, there’s an adult as well, so somehow 1.4 million people are going to end up living in shanty towns and dying of kwashiorkor, all in the space of a year. The World Bank defines absolute poverty as less than $1.25 a day in 2005 dollars. From an operational standpoint it means having limited or no access to food, clean water, sanitation, shelter and education. If there’s 700 people in the UK who fall into this category I’d be stunned. People can slip through the cracks, as Haringey social services demonstrate, but she is saying that effectively the ranks of the utterly destitute are going to swell next year by the population of Leeds, Cardiff and Liverpool combined. Stupid twat.

  11. Bloke in Costa Rica:

    30m children in the UK? That would be 50% of the population which would be nice from the perspective of the long term viability of our welfare state, but not likely

    12m/20% of the population would be my guess, which makes your point more valid and just underlines the shear bobbins that emanates from la Toynbee – a monkey with a semi functioning typewriter would know that it was bollocks before they hit the key(s)

  12. You assume a rational definition of absolute poverty. To Polly’s mind, absolute poverty probably means not being able to afford two holiday homes, and only having two glasses of champagne with each meal.

    There is a general problem with bleeding heart types and sums. I had to watch a tearfund produced video earlier today (don’t ask!). It detailed (in vivid colour, being clearly shot and edited by a professional) the unfortunate fate of two girls, aged 11 and 13, who were detailed by their family to go twice daily on a 2 hour trek down a mountain and back to fetch a 20l drum of water each. Clearly I was supposed to feel great empathy for them, and thus fork out the ‘just £14’ they need to build a tank to catch rain water to save them the trip.

    Unfortunately, I can add up, and found myself asking what in earth they were doing at the top of this mountain that needed 80l (that’s like a bath full) of water every day… I mean, I don’t use that much every day, and I’ve got the stuff on tap. Answer came their none, or at least none that made any sense.

    I didn’t ask, although perhaps I should have done, just how many £14s they had spent on flying out two members of the Olympic rowing team (to demonstrate that carrying 20kg up a steep hill is hard work) plus a camera man… Quite a few I suspect.

    Trouble is, it’s easier and more fun to edit videos in a cosy London office than it is to actually do anything useful in a third world dump.

  13. Bloke in Costa Rica

    If it takes you two hours to get to your water supply, move.

    I looked up UK demographics (which I should have done earlier). 2011 census says 23.9% of population is 0-19. At 0.6% p.a. growth from the year-end 2011 numbers total population is very close to 64 million. So there’s actually 15.3 million children in the UK and Polly looks like even more of an innumerate.

    Lefties (and journalists; the Venn diagram of the two groups has a big intersection) have a chronic problem with orders of magnitude. I’ve yet to meet a journo who can read a statistic and smell an obvious rat. Fermi approximations were a big part of our initial training as physicists. Having a rough grasp of the sort of scale that is plausible in a given situation is a key component of a functioning bullshit detector.

  14. I think I may have asked this before but is not the lowering of the 40p threshold and raising of the personal allowance a [deliberately planned?] step towards a flat rate tax?. [of, say, 30%]

  15. Bloke in Costa Rica & h,

    I think she’s getting her numbers from this IFS report:

    http://www.ifs.org.uk/bns/bn144.pdf

    I’ve not read it, only scanned through. It says:

    “our UK-wide projections are for child poverty to increase by 2.7ppts (or 400,000 children) using the relative low-income measure and 5.6ppts (or 800,000 children) using the absolute low-income measure over the same period. Absolute poverty rises by more than relative poverty because median income continues to fall in real terms between 2011–12 and 2014–15 – we estimate that median income fell 2.4% in 2012–13 in real terms and that it will continue to fall slightly in 2013–14 and 2014–15. Thus, the gap between the relative and absolute poverty lines is projected to grow throughout this period.”

    Note this is over three years post-recession and is linked to the fall in incomes.

  16. Reading the Prole’s description of the water carriers sets me wondering about a lot of similar stories. it may not be obvious to you children of civilisation, but constructing a water tank isn’t exactly rocket science. The £14 sounds like the price of a polythene liner, which is how I’d do it, by choice, But I’m also aware the problem’s been solved in various ways, by numerous cultures over thousands of years. It’s a hole of some kind, made impervious to water. Romans had one, just down the hill from here, lined with a thin layer of clay when crosslinked polyesters weren’t even a gleam in an alchemists eye.. There’s other methods, depending on the materials available. I’ve used some of them, on occasion.
    So I do wonder how these relief organisations manage to continually stumble across people who seemed to have been dumped in locations where they’ve apparently no cultural background of solving trivial problems thrown at them. Or to put it another way, were the two water toting lassies’ family from Belgravia or somewhere?

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