It’s an interesting starting point isn’t it?

The wealthiest 20% of Britain’s earners will receive almost as much support from the state through the “shadow welfare” of generous tax-breaks by 2020, as the poorest fifth take home in benefits, according to a new analysis by the Fabian Society.
….
From the perspective of disposable income it makes no difference whether the government gives you a tax allowance or a cash payment,” he said. “The government must explain how it can justify giving more money to working couples through the ‘shadow welfare’ of tax reliefs than to the unemployed through benefits.”

Not taxing people is the same as taxing others to give people money. That is, the starting point here is that all belongs to the State and you only get what you’re given.

Hmm, no, let’s start hanging people who think that way, shall we?

How would you like £3,166 a year of free money from the government? Sounds too good to be true? Well if you’re in a reasonably paid job that’s exactly what you’ll be getting when the new financial year starts in April. This sum is the cash value of two huge tax breaks, the income tax personal allowance, which will exempt £11,000 of taxable earnings, and its equivalent in the national insurance system.

Yes, hang them.

14 thoughts on “It’s an interesting starting point isn’t it?”

  1. Harrop argues that the revenue foregone by the Treasury still amounts to financial support, and politicians should ask themselves whether this represents the best use of taxpayers’ resources.

    No it isn’t (first point); yes it is (second point).

  2. I have skimmed through the article yet cannot see an income value which is the threshold for the “wealthiest 20%”. I am assuming there isn’t one because it would make the “wealthy” claim look ludicrous. I expect it would be a gross income which would struggle to buy a flat in most places in the South East.

  3. “How would you like £3,166 a year of free money from the government? Sounds too good to be true?”

    Seriously? Free you say? I don’t have to work for it or anything? Oh, I do, for every penny.

  4. The tax free allowance is, roughly, progressive. It ensures that, by and large, your average tax rate (if not the marginal one) gradually increases with income. (Ok, for low earners it doesn’t have this effect, for instance, but since the writer cares so much about the poor then presumably the poor paying tax should be an undesirable outcome?)

    Does the author consider it a tax break that higher rates are marginal, and think eg the 40% rate should really apply to every penny earned, once you reach that bracket?

  5. If ot’s a bigger tax break (and as a proportion of I come it most certainly isn’t) that’s because the marginal rate of tax is higher in the first place. Ritchie applied the se logic.to.U.S. corporations parking money in the Bahamas: proof positive that tax avoidance distorts markets. No suggestion that it was the tax being avoided that distorted the market, or that it’s the government helping itself free to the money you’ve worked for, oh no.

  6. “How would you like £3,166 a year of free money from the government? Sounds too good to be true?”

    Let’s ask the Left, they are experts.

  7. “Does the author consider it a tax break that higher rates are marginal, and think eg the 40% rate should really apply to every penny earned, once you reach that bracket?”

    I can see Corbyn proposoing something like the old stamp duty slab tax system for income tax-most people on lower incomes would think it very fair and appealing even if I don’t.

  8. “Does the author consider it a tax break that higher rates are marginal, and think eg the 40% rate should really apply to every penny earned, once you reach that bracket?”

    If so, all he’s doing is moving the personal allowance withdrawal that starts kicking in at earnings of £100k down the earnings scale…

  9. My income was £9,640 last year just gone. That means the governmemt “gave me” £2k of not paying any income tax or NI. So why hasn’t my bank account seen £11,940 go into it? Swindle! Gimmie my money!!!!

  10. The State taxes some people at 45%. That means every basic taxpayer is getting 25p in every pound of FREE MONEY from the Government!!?

    Not really, but I was just applying their ‘logic’.

  11. Is the tax-free personal allowance similar to the US standard deduction where that amount is subtracted from the base income before taxes are calculated?

    The author expends a lot of words trying to explain how this credit increasing is somehow a bad thing but I’m just not seeing it. If fewer marginal earners are on welfare thanks to paying less in taxes the numbers are about what we should expect. What exactly is Ms Stewart’s problem? Is she trying to convince me we should get rid of a sensible tax credit to put more people on welfare as the article reads?

  12. In other news :

    People who don’t earn enough to pay tax don’t actually benefit from raises in the threshold at which you become liable for tax.

    Okay – but lots of other people do.

    Secondly, people who don’t earn enough to pay middle rate tax don’t actually benefit from raises in the threshold at which you become liable to pay tax at the middle (notionally referred to by idiots as ‘higher’) tax rate.

    Well, bloody marvellous. You’ve unearthed a huge conspiracy that’s only been obvious to people with basic arithmetic skills.

    Oh,

    sod,

    bloody Guardian journo. Oh, well …

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