Wednesday, October 6, 2010

Child Benefit fiasco


The Child Benefit fiasco has raised objections. But not the right objection.

Yes it is ridiculous and unfair that a couple on shared income of £87,000 might keep child benefit, whereas a couple on combined income of £45,000 may lose it.

The Tories say it's fair that the middle classes take a hit too. Which is true. But, why should someone on £45,000 lose out on about £1,500 a year, but someone on £2 million or £20 million a year lose no more? This is not a way of making the better off pay their fair share.

The really fair way of hitting the better off would have been to raise the top rate of tax. But of course that would make the super rich pay more, wouldn't it? You know, people like George Osborne's banker friends.

When even this small change is such a balls-up, it doesn't inspire much confidence that Osborne knows what he's doing.

15 comments:

Mike N said...

universal benefits are a bit daft in that respect, but if you're going to have them then they should be truly universal.

he problem is they were only introduced to offset the fact that more money was going to the tax man in the first place - give with one hand and take away with the other. It was teh government not trusting parents to spend their money on their kids, and creating a load of unnecessary admin positions to handle it.

Do away with the lot, give tax breaks to those with children, and increased tax allowance when one partner is home to look after the kids. It's not hard.

And as to whether that should apply to everybody, of course! Why shouldn't it? If you base your economic policies on the fact that a growing population is good for the economy (a fantastically short sighted plan as far as I can see, but one that pretty much all countries seem to subscribe to) then it does need to be universal benefits.

And I've never understood why somebody should be punished with higher taxes for being rich (and no, I''m not rich by a long shot! Besides, I live in socialist Sweden).

Plus, is there not a 50% top tax rate for the super rich already? or do you propose we resurrect the old Harold Wilson rates of up to 95%?

Beatles - Taxman
----------------
Let me tell you how it will be;
There's one for you, nineteen for me.
'Cause I’m the taxman,
Yeah, I’m the taxman.

Should five per cent appear too small,
Be thankful I don't take it all.
'Cause I’m the taxman,
Yeah, I’m the taxman.

(if you drive a car, car;) - I’ll tax the street;
(if you try to sit, sit;) - I’ll tax your seat;
(if you get too cold, cold;) - I’ll tax the heat;
(if you take a walk, walk;) - I'll tax your feet.

Taxman!

'Cause I’m the taxman,
Yeah, I’m the taxman.

Don't ask me what I want it for, (ah-ah, mister Wilson)
If you don't want to pay some more. (ah-ah, mister heath)
'Cause I’m the taxman,
Yeah, I’m the taxman.

Now my advice for those who die, (taxman)
Declare the pennies on your eyes. (taxman)
'Cause I’m the taxman,
Yeah, I’m the taxman.

And you're working for no one but me.

Taxman!

Stephen Law said...

Plus, is there not a 50% top tax rate for the super rich already? or do you propose we resurrect the old Harold Wilson rates of up to 95%?

No it's 40% whether you are on £45k pa or £20 million (though if you are in latter category you have probably found ways of paying almost nothing).

wombat said...

Leaving aside the arguments for/against redistribution of wealth. Is there not an argument to be made for taxing people who have children?

(1a) The population of the UK is at such a point that it is becoming increasingly difficult to sustain a happy environment for the residents.
(1b) The world is overpopulated. We should be doing our bit and shrinking the local birth rate so that we can accommodate some of the others from elsewhere.

(2) Children whose parents are not prepared to give up something substantial for them are not showing sufficient commitment. To encourage continued good parenting maybe parents should get a rebate if their offspring make it to 21 without a criminal record.

Richard T said...

Might it be that the mind set of the Tories is that they can't grasp how much losing even a couple of pounds a week means to an awful lot of families - individuals as well for that matter. If you've never lived in a household where by the end of the week you're stretched to find enough to get by, you can be as glib as they are.

Vallo said...

It is still true that in some families of all income brackets women have no control of the finances. The only money that they can spend as they wish is the child benefit. This is why I think it should stay as a universal benefit.

Mike N said...

Is this no longer valid then?

http://news.bbc.co.uk/2/hi/uk_news/8604215.stm

Stephen Law said...

Mike N Wow somehow I totally missed that! I wonder if it will happen now though?

Seer Travis Truman said...

One must understand that all societies of earth are based on the illegitimate family unit mythology.

There is no reason why any parent should receive any money, or any child should rely on the income of the caretakers.

The Truth is that each CHILD should receive any funding required for good health and education.

Anonymous said...

The 50p has already come into effect, and the tories have said that they have no intention of reversing it.

Stephen Law said...

Good! Shame on me for not knowing about it (or forgetting).

Mind you what has the 50p rate got to with the point I was making: that cutting child benefit is not a fair way of raising revenue comparing to, say, raising the rate on 44K plus slightly to raise the same amount?

Stephen Law said...

ps. Of course the Tories are not going to drop a 50% band of tax now, are they. They'd be crucified.

Kev said...

This sort of anomaly can be sorted out later - the priority now is to get lazy slobs back to work and for people to pay for their own kids.

Anonymous said...

Don't hold your breath

Tom Rees said...

If we make the assumption that children benefit everyone (because they will keep the economy going in our old age), and that the birth rate is dropping due to time utility (women can have kids or earn a lot of money, and frequently choose the latter. This dilemma is particularly acute for professional, high-earning women.

Then there's an economic case for recompensing mothers for the earnings loss associated with having kids. In which case, child benefit should be available to all, rich or poor.

Just sayin'!

Hugo said...

"This is not a way of making the better off pay their fair share."

How do you define "fair share"?