No tax on the minimum wage

One of Ukip’s basic promises for this campaign. One of only five in fact.

Yes, we all know where my sympathies lie anyway. And some of us know the source of this policy as well. But it’s also a good enough policy to get my vote all on its lonesome.

54 thoughts on “No tax on the minimum wage”

  1. No tax or no income tax? is the promise to also raise the NI thresholds for both employer’s and employee’s NICs?

  2. The beauty of this is that it will take votes of Labour.

    Not that I want the Tories to get re-elected – not this version of them, anyway. Actually, probably no version of them.

    I’m increasingly inclining to the view that eternal hung parliaments, where they bicker amongst themselves for a year and then try again, and in the meantime can’t do much, are the way forward.

    (Assuming we can’t have a fiscally sensible, socially liberal government, which it seems we just can’t.)

  3. “we can’t have a fiscally sensible, socially liberal government”: oh yes we can. Vote for me.

  4. The problem with abolishing income tax for the low-paid is that it’s the only tax that many, if not most, people think that they are actually paying. It’s impossible to convince many people (and anyone in the Labour Party) that it’s ordinary people who pay Employer’s NIC, green levies, FTT etc etc. People only think about VAT if it goes up and then it’s quickly forgotten about again as retail prices are never quoted ex VAT.

    Thus taking the low-paid out of income tax means creating an every larger quota of people who think they can vote for more and more ‘free stuff’ or vote for higher and higher taxes on everybody else.

    I’d certainly have a very low income tax rate for the low-paid (5% ? 2% ?) but I think it’s very important that these people see every week in their pay packet that they are contributing something..

  5. Or just not voting at all.

    Also how will you award working family tax credits for people on the minimum wage with no tax. Or is the case that in work benefits paid over and above tax .
    Isn’t the minimum wage level set net of tax. ie dont the people who calculate what the minimum wage is to be allready take tax into consideration. If minimum wage Income tax comes from the employer or the customer then removing it removes that income stream from the Treasury.

  6. @Interested,

    It didn’t go unnoticed that, mid-2000s, Belgium underwent quite the economic recovery in the >1 year that they had no government.

  7. BTW, I’d vote for this policy, but obviously not for the Polyanna vision of how really, honestly, very, different Elysian Britain would be, freed of the shackles of the garlicwurst-smelling tapas and cabbage munchers.

    And the Fruitcake-in-chief is a huge turnoff.

  8. “I’d certainly have a very low income tax rate for the low-paid (5% ? 2% ?) but I think it’s very important that these people see every week in their pay packet that they are contributing something.” It might be more effective to require that all prices be displayed with and without taxes and duties. The price of petrol, or of a pint, would then be particularly revealing. Similarly, all pay should show deduction of income tax and both employee’s and employer’s NICs.

    It seems to me that the case of pulling the pow paid out of income tax isn’t a moral one at all, a la Tim; it’s a practical one. They are disproportionately taxed, I imagine, on their petrol, booze and fags – so relieving them of income tax would rebalance that. I’ll bet someone here can show whether that guess is right.

  9. I’m increasingly inclining to the view that eternal hung parliaments, where they bicker amongst themselves for a year and then try again, and in the meantime can’t do much, are the way forward.

    Or better still, the Belgium approach of no government for the best part of 2 years. Didn’t seem to do them any harm.

  10. You get the downsides and no benefit to the minimum wage earner. Its a mandated price – if you want to put more money in the pocket of the minimum wage earner then you raise the minimum wage. Taxation and the effects of it are a different issue.

  11. “The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing.”

    Fact is, minimum wage earners aren’t hissing. Many of them aren’t highly mobile so it’s not as if they’ll leave. Some of them are highly mobile (Polish plumbers, etc.) yet they keep coming. So there’s no economic requirement to cut tax for the poorest; indeed it could probably even be raised a bit.

    Yes it’s harsh, but life isn’t fair.

  12. They aren’t hissing.

    Where the wage is awarded due to law rather than happenstance The wage rate and the tax rate are both products of government policy, and so the taxation part is notional only.

  13. Just remember my example from yesterday (2015 / 16 figures).

    A couple with a single earner on £30k per year will pay £3,300 in income tax (assuming some personal pension contribution) and £2,600 in personal National Insurance contributions.

    However, if they have 2 school-age kids, they will get £4,200 in Child Benefit and Child Tax Credits.

    So – on not a bad wage – above the median – there is a net contribution (as far as the average person who won’t count Employers’ NI as a tax on them) of £1,500. 5%

    And VAT, Insurance Premium whatsit, petrol taxes, booze taxes, Airport Passenger Duty etc, of course, but then the “average person” probably doesn’t take those in to account either.

  14. “….notional only” –
    Where the tax reduces the wage less than the minimum wage increases it, that is.

  15. OT, but election-related. Have you seen Martha Lane Fox’s pitch for a cushy government funded job?

    You remember Martha Lane-Fox, her lastminute.com website was one of the most visible British players in the dotcom bubble. Since then it has struggled along without turning much in the way of profits.

    Unable to replicate her success in selling a business for multiples of its worth during a tech bubble in which gullible VC’s were chucking money at “the internet”, Lane-Fox now wants the taxpayer to remunerate her as a sort of professional dot-scold:

    http://www.theguardian.com/commentisfree/2015/mar/30/tech-giants-too-much-power-reclaim-internet

    Britain could be brilliant at digital, but we’ve been too slow, too incremental – in skills, in infrastructure, in public services. We need to be bolder. We need a new national institution to lead an ambitious charge – to make us the most digital nation on the planet. And I don’t say this because I’m a fan of institutions.

    Unless… somebody wants to hire you to run one, eh Martha? Then you might reluctantly accept…

    But today, we’re letting big commercial technology platforms shape much of our digital lives, dominating the debate about everything from online privacy to how we build smart cities.

    We’re letting them? This must be the royal “we” from Baroness Lane-Fox. In truth there are a lot of privacy and other initiatives from individuals, nonprofits, and the UK and EU governments.

    Imagine a new kind of digital organisation, diverse and independent but with a strong mandate from government. It would fight for civic, public projects to balance the power of the commercial internet. It could be the catalyst we need to shape the world we want to live in and Britain’s role in that world. It would help us address some of the biggest issues we face, but it would also engage with people in a new, radical way. In fact, I probably wouldn’t call it an institution at all. This would be no normal public body.

    Let’s call it: British Leyland.com. Forward to the 1970’s!

    If we want to balance the world of dotcom let’s create doteveryone. I would prioritise three areas that I think best demonstrate the opportunities we should be grabbing with both hands: education, women and ethics.

    First, doteveryone would help educate people from all walks of life about the internet. The internet is the organising principle of our age, touching all our lives, every day. As the late activist Aaron Swartz put it, “It’s not OK not to understand the internet any more”.

    Ah, SJW-speak. It’s not OK. In fact, it’s problematic. How can one-legged black lesbians transgenders of colour navigate these digital spaces without a well-funded public body?

    We need to make sure that those in power understand how the internet can help us redefine public services, improve the lives of the most vulnerable and bolster our economy.

    Leaders and legislators cannot lay claim to grasping the power and potential of the internet just because they’re on Twitter. What we need is politicians and leaders who can escape the old assumptions. I’ve seen that real change is possible, for instance, in the creation of the Government Digital Service in the Cabinet Office in 2010, which has become a recognised world leader in creating digital public services.

    I’d never heard of the Government Digital Service. So imagine my surprise when I googlised it and it turns out this public sector boondoggle – so effusively praised by Martha Lane-Fox – had its flagship strategy written by… Martha Lane-Fox. Small world, innit?

    But we need to move faster. There is a crisis in skills and the understanding of the digital world’s power and potential, but it is not limited to the corridors of Whitehall or the boardrooms of the City. It’s also the case in some of our most disadvantaged communities. We must ensure that the 10 million adults who can’t enjoy the benefits of being online because they lack basic digital skills no longer miss out.

    Second, doteveryone must put women at the heart of the technology sector.

    “Women in tech” is the latest arbitrary feminist fetish. Apparently the genital configuration of our coders and datacentre technicians is really important, despite or perhaps because women show relatively little interest in those boring, geeky jobs.

    At the moment, there are fewer women in the digital sector than there are in parliament.

    Bullshit.

    Something that is for everyone should be built by everyone.

    O RLY? Will we get children to help build new hospitals, too? Will we force women to dig trenches and lay track for HS2? What bloody difference does it make who builds something that we all can use? I like driving on the M6 Toll Road, I have no desire to put on a hard hat and lay tarmac on it.

    I believe social media platforms would have done more to stop abuse if they had more women in senior positions,

    Like Reddit, which has responded to the failure of its CEO’s trumped-up sex discrimination lawsuit by… banning discussion of its CEO’s failed trumped-up sex discrimination lawsuit.

    And how about the Apple health kit that went to market without anything to do with periods?

    Eh… how about it? A capitalist entrepreneur would see a gap in the market and launch their own, woman-friendly health kit. The moral entrepreneur uses it as an opportunity to cry that she should be given a cushy government job producing nothing.

    Building an awesome cohort of female coders, designers and creators would help make us the most digitally successful country in the world and give us an edge.
    Why not launch a national challenge to source the best ideas? Why not offer every unemployed woman free education and training?

    Because for one, it’d probably be illegal sex discrimination. For another, coding jobs are relatively poorly paid, easily offshored, have shite job security, and women show little interest in them. Apart from that it’s a great idea.

    There are exciting projects happening in the UK such as Techmums, Stemettes and Codebar,

    The most exciting projects you’ve never heard of.

    but there need to be more of them, with bigger impact, so we foster the maximum breadth and depth of digital talent. Surely there must be a couple of new Ada Lovelaces lurking in this land?

    Ada Lovelace didn’t need patronising special treatment or taxpayer funded sinecures.

    Finally, we should aim for a more ambitious global role in unpicking the complex moral and ethical issues that the internet presents. In this 800th year anniversary of the Magna Carta why don’t we establish frameworks to help navigate the online world? For instance, what are the implications of an internet embedded in your home appliances? Do children need online rights? What is an acceptable use of drones? Our rule of law is respected the world over; doteveryone should help make us world-leading in answering these questions. Practically and usefully.

    The Yanks, the Indians, and the Chinee are just waiting for Blighty to tell them what to do on the internet. No laughing at the back!

    Doteveryone won’t, and shouldn’t, feel familiar. No grey suits, no dusty buildings.

    Christ on a bike. She’s really nostalgic for the heady days of the 90’s dotcom bubble, isn’t she? She forgot to mention beanbag chairs, Cool Britannia, and Damon Albarn though.

    It’ll be a diverse team with many skills, bursting with women and demonstrating to the world what the future of technology looks like. It will be a place where both the private and public sector would want to send employees for a year because of the invaluable experience they will get.
    Doteveryone will be an independent organisation. It will have a strong mandate from government, but also from the public – we will be setting its agenda, informing it and taking part in it. It might produce written reports but it would also prototype services. It should show what is possible when you put the internet at the heart of design.

    It’s such a wonderful idea that no commercial entity wants to fund it. That’s where you come in, Mr Taxpayer.

    Doteveryone should aim to do 50 significant projects in the next 10 years. After that, we should be brutal in assessing if we need it. It doesn’t need to last forever; it needs to make itself redundant. We should be making sure that the original promises of the internet – openness, transparency, freedom and universality – are a national asset, as integral to our soft power as Adele, JK Rowling, Shakespeare, or even Downton Abbey.

    Shakespeare, Churchill, The Beatles, Sean Connery, Harry Potter, David Beckham’s right foot, David Beckham’s left foot come to that…

    I have started a petition calling for the next prime minister to start building this idea. Please sign it. Britain invented the BBC and the NHS. Let’s not have a poverty of ambition in this new century: we can, and should, be inventing the definitive public institution for our digital age. Let’s encourage the winner of the next election to focus on making Britain the most digitally powered up country on the planet.

    At least Yosser Hughes had the decency to be straightforward in asking gizza job.

  16. BiG- “freed of the shackles of the garlicwurst-smelling tapas and cabbage munchers.”

    You could lay that at the door of all political parties and then If they do get power there’s always the Palin line ” how’s all that hopey dreamy stuff workin out for ya?”

  17. Steve: Not OT: that was pure incitement. 🙂
    It’s a classic of it’s type:
    1.Something must be done
    2.and i’m the person to do it
    3. Right where do we start? Budget.. yes, let’s get that out of the way, it’s a big task so no use fooling anyone that it’s not going to come cheap.

  18. “For another, coding jobs are relatively poorly paid, easily offshored, have shite job security, and women show little interest in them.”

    Mine is extremely well paid, not so easily offshored because we have discovered Indian DEV teams are shit, job security is great because I can leave today and probably get another job tomorrow, women may or may not be interested, who cares?

  19. Interested

    I’m increasingly inclining to the view that eternal hung parliaments, where they bicker amongst themselves for a year and then try again, and in the meantime can’t do much, are the way forward.

    BiG / Tim Newman

    Belgium

    With the quality of politician we currently have standing, that looks pretty optimal to me.

  20. Excellent stuff, Steve.

    Britain invented the NHS and the BBC, ideas so wonderful foreigners are falling over themselves to copy them.

    We should be inventing the definitive public institution. Ah, but we already have. The potato council.

  21. Citizens have the right to be treated equally by their government. Taxes should be general, and levied in equal amounts or equal rates. If you are going to have an income tax, it should be applied to all income, and at one rate.

    Pick a rate. 5%? 10%? Fine. Apply it to everyone. Period. All else is tyranny.

  22. It should show what is possible when you put the internet at the heart of design.

    Ah, a solution in search of a problem. For years car manufacturers have been struggling with the issue of putting internet in cars for no purpose other than putting internet in cars. I own a new-model BMW, and aside from the SatNav, the often useful online search for places and businesses via the SatNav, and an SOS system I’ve never used, the main showcase “connectivity” element via the inbuilt SIM card is….getting access to your Twitter feeds when on the road. How very useful.

  23. Oh, and if Britain wants to become the most digitally connected places on the planet, it will need to follow Estonia’s lead and dispense with offices full of bureaucrats carrying out menial government functions and allow people to do everything online instead. To be fair, Britain isn’t so bad at this anyway. In France, you need a foot-high stack of paper to do anything.

  24. “National Institution”. LOL.

    I expect she would have been calling such a thing an “intrusive bureaucratic monolith” ten years ago but she had a different job then.

    As for the “we’ll abolish ourselves in ten years” line, I mean, really. Just fuck off.

  25. Steve quoting Lane-Fox:“Second, doteveryone must put women at the heart of the technology sector.”

    Then why are you calling it doteveryone, you daft bint?

  26. @Stdeve

    Do I read that right, that ML Fox thinks women are an opportunity that should be grabbed with both hands?

    Interesting.

  27. @Tim N

    I think you’re wrong re the net in cars. If you don’t have kids I can understand why. On long drives to (eg) French holidays it would be most helpful at times to have access to the net – not for the driver but for the passengers.

  28. State-defined “Durchschnittsentgelt” used for calculating social security benefits is €34,857. This is a mean, not a median, it excludes very low incomes (€450 a month), includes part-timers above that level, and counts every income over the contributions cap (about €6000 a month) at the cap.

    Employment ministry claims median pay for full-timers of €2676/month, or €32112/year, in 2009. The figure I gave earlier might be a mean.

  29. Median household _net_ income in 2012 was €36,828

    No it wasn’t. This (p48) Bundesbank report gives median household net income in 2013 as €22,800 and median household gross income as €32,540. Which, at current exchange rates, and allowing for a modest increase in the last year or so, is very similar to the UK figure.

  30. @PaulB, I’m talking about pay to salaried employees. Household income is something very very different.

    The figure I gave for households might be a mean, not a median (the mean is always higher), it is frustrating trying to get accurately-described statistics rather than numbers flung around for political purposes, and I have my job to do…

  31. Steve quoted Martha Lane-Fox as saying:

    “Building an awesome cohort of female coders, designers and creators would help make us the most digitally successful country in the world and give us an edge.”

    It sounds like a cargo cult. Some coders are successful. If we have coders we will be successful too. Speaking code appears to have replaced speaking Mandarin as the futurist promised land of employment and productivity.(Would speaking Mandarin code be even more beneficial?)

    Every child will get a Little Red eBook. The great digital leap forward will see children learn to code on some dead end app making … app, probably with the BBC brand somewhere on it. On a BBC branded tablet. And as soon as someone makes a sideways scrolling Top Gear beat-em-up it’ll all get thrown in the bin.

  32. Cal – Thanks. Trying to get rid of me, eh? 🙂

    Hallowed Be – it’s gorgeous, isn’t it? Not many people would have the brass neck to set up a petition asking the government to create a quango for them to run.

    Rob – Yar. If you have the right skills and experience, you can be very valuable indeed. Most “coders” don’t though. We have a lot of unemployed computer science-type grads (and I particularly feel sorry for the poor bastards who got conned into doing game design studies) , and the Indians – though usually nowhere near as good as they say they are – do work for cheap, which is hoovering up a lot of the entry-level tech jobs.

    People who think “women in tech” is an important issue don’t seem to care very much about women. Not as human beings with their own preferences. If they did, they wouldn’t try to browbeat them into jobs they show little interest in, and they’d let the women who are interested in being techies get on with it without having to worry about being some sort of standard-bearer for the sisterhood.

    They “care” about women as avatars of “diversity”, not as individuals.

    And the tech industry has been targeted partly because it’s seen as sexy, and partly because it’s a soft target for diversity shakedowns. Note that nobody’s demanding more women plumbers, taxi drivers, or dentists. And note that the biggest evangelists for “women in tech” don’t seem to care to work in tech themselves. Like… Martha Lane-Fox.

    If she believed that there is a tremendous untapped opportunity to hire brilliant female techies… why not set up a business and do that?

    Roue le jour – 🙂 At least the Potato Council has a clear remit: to promote the potato industry. Baroness Lane-Fox wants her own non-departmental public body to do… something-something women… social inclusion… err… other things. But it’ll be bold and ambitious and awesome!

    Tim Newman – For years car manufacturers have been struggling with the issue of putting internet in cars for no purpose other than putting internet in cars

    And despite that, you still only get one poxy cigarette lighter /charging point as standard. Would it kill them to stick a couple of USB ports on the radio?

    JuliaM – dotEverybodywhomatters

    Interested – Now then, now then, now then…

    Gareth – It sounds like a cargo cult. Some coders are successful. If we have coders we will be successful too. Speaking code appears to have replaced speaking Mandarin as the futurist promised land of employment and productivity.(Would speaking Mandarin code be even more beneficial?)

    Exactly right. It’s worse than Mandarin-mongering. At least teaching Mandarin is a clearly defined goal.

    What does teaching “code” mean? Java, C+, Perl, Pascal, Visual Basic, Swift…?

    Every child will get a Little Red eBook. The great digital leap forward will see children learn to code on some dead end app making … app, probably with the BBC brand somewhere on it. On a BBC branded tablet. And as soon as someone makes a sideways scrolling Top Gear beat-em-up it’ll all get thrown in the bin.

    The Beeb did something pretty sensible back in the early 80’s, when they sponsored the BBC Micro. Many a British schoolchild’s first experience of computers was on one of those.

    That was in the days when home computers were still widely seen as a cross between magic and a passing fad. There’s just no need for any grand publicly funded computer projects now – everybody who wants a computer can afford one. You can get a Windows tablet for £80.

    That’s why Martha Lane-Fox’s proposed remit is so vague. Her quango would be engineered to hit whatever buzzwords are politically correct at the time. It’s Dotwhateveryouwantittobe, a digital homage to the Millennium Dome.

    After all, “Doteveryone should aim to do 50 significant projects in the next 10 years.”

    In the spirit of pulling numbers out of our arses, why not 500 projects? Or 5? Even Stalin’s five year plans had tangible goals.

  33. Interested,

    “I think you’re wrong re the net in cars. If you don’t have kids I can understand why. On long drives to (eg) French holidays it would be most helpful at times to have access to the net – not for the driver but for the passengers.”

    Buy a mifi. Job done.

    Why are people bothered about things being built into cars that can be easily plugged in? I see all these car ads talking about sat nav, but my phone already does that, and it works with my bluetooth car radio. I can be driving along listening to my Britney Spears albums and the Sat Nav woman tells me to turn left. Why do I need one built in?

  34. http://www.ons.gov.uk/ons/dcp171778_385428.pdf

    For the year ending 5 April 2014 median gross annual earnings for full-time employees (who had been in the same job for at least 12 months) were £27,200, an increase of 0.7% from the previous year.

    At today’s exchange rates, £27,200 is equivalent to €37,550. Not too shabby really.

    Of course the big difference with Germany is the cost of living. Even outside London, housing costs are extortionate; public transport is an expensive joke. (For £3,000 a year you can either buy a season ticket from Leatherhead to London, or a BahnCard 100 covering all of Germany; I believe it’s tax-deductible too.)

  35. The Stigler: ‘ I can be driving along listening to my Britney Spears albums and the Sat Nav woman tells me to turn left. Why do I need one built in?’

    Bonnie Tyler’s ‘Total Eclipse Of The Heart’ must be a bit awkward, then..?

  36. If you don’t have kids I can understand why. On long drives to (eg) French holidays it would be most helpful at times to have access to the net – not for the driver but for the passengers.

    Ah, good point. No, I don’t have kids.

  37. I can be driving along listening to my Britney Spears albums and the Sat Nav woman tells me to turn left. Why do I need one built in?

    Mainly, for me, it’s about having the map displayed on the biggish screen in front of me (and slightly to the right) instead of on an iPhone supported on a dubiously sticky third-party stand, and also having the turns and junction map displayed in the HUD in my windscreen. I never liked using the phone as a SatNav, mainly because of the mounting issues and it being fiddly to fiddle with your phone while driving, as opposed to the in-car SatNav interface.

  38. Having lived in Germany, the cost of living, especially the cost of the weekly groceries bill is a lot lower than the UK, probably by about 1/3.

    A typical family of 2.2 children on average salaries would be much better off in Germany than in the UK.

  39. John,

    But do you get coloured two-ply toilet paper, that matches the colour scheme of the bathroom, in Germany?

  40. But our taxes are higher and we have a grand socialist coalition in charge ruining the country.

    As for the groceries, yeah, but it proves you get what you pay for.

  41. If I was weighing up the pros and cons of a party’s policies, this one would be on the negative side of the ledger for me.

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