Chris Dillow attacks David Cameron for saying that families with incomes (net of pension premiums, Gift Aid contributions, income from PEPs and ISAs, and various other items that I do not bother to remember) of more than £50,000 do not need Child Tax Credits. I should have thought that was patently obvious.
What is the point of simultaneously charging people higher rate tax and paying them tax credits apart from creating jobs for civil servants in HMRC?
If you want to worry about marginal tax rates don’t look at those on £50k, look at the family that is struggling on £20k, with the wife at home looking after small children and the husband commuting – his effective marginal tax rate is 71% and he gets no tax relief on his train fare (I am self-employed so I do get tax relief on my train fare so despite an effective tax rate of 81% – my elder son is at university – I am better off than the typical wage-slave).
Income tax is supposed to be based on ability to pay so either raise the threshold to 80% of median income and charge 50% (including NI) on income more than 150% of the median, abolishing higher rate tax relief on pension contributions, or follow Alaska (the idea predates Palin so don’t panic) and give everyone a basic income out of North Sea Oil taxes and then tax them on the excess.
The Tax Credit system is a Abomination – I suspect that the number of errors is nearer 90% than the published 30+% because the Inland Revenue staff themselves do not understand it and it took FOUR YEARS for a determined individual to get the data with which to check his allocation (even the last answer was incomplete, but after a few more months I managed to assemble the picture). As far as I can tell, every single form sent to me by HMRC has been wrong. I have savings from my hard-working bachelor youth so we can get by but the average family cannot.

Ah ha, concern about marginal tax rates. Now we’re getting somewhere. I hope you’ve read the research from the CPS that shows how someone on benefits can face marginal tax rates of up to 95.5%.

Don’t worry, we’re not confused on tax credits. We know exactly what they are.

Tax credits is not only getting couples back to work and single people that otherwise are better off not working, but it also is the difference of people that are married, or with partners get back to work and help with costs of the nursery. If mums cannot get back to work with the help of these credits and going back to work they will also be joining the non workers, when all they want is to be able to provide for their families themselves.

We cannot continually expect couples either married or with partners to continually work without being able to have their own families as they are paying for everyone else, who many of are left unemployed through no fault of their own. Tax credits should definitely stay. Would the politicians like Theresa May and David Cameron be also to provide for their families and put them in nurseries with a joint income of £50,000. Couples with this joint income have worked jolly hard to get to this position to pay their own homes and families and cannot afford to be continually penalised.