Taxpayers’ Alliance: take from the poor to give to the rich


1:30 pm - July 22nd 2010

by Don Paskini    


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The Taxpayer’s Alliance have a new report out about how to reform welfare.

They claim to have spent a lot of time on the report, and it includes detailed calculations for things like the computation of negative income tax (if rG – T >= 0, then N = M – rG + T and so on).

It is an attempt to simplify the benefits system and improve financial incentives for people to take a job, while reducing the overall cost of the system.

The way that it seeks to do this is by making lots of middle and lower income taxpayers considerably worse off.

There are pages of pseudo-scientific gibberish and hand waving designed to obscure this point, but the report couldn’t find any space to set out, for example, how many people would see their income reduced or by how much under their plans.

But using their figures, it is clear that very many families with children would see huge cuts in their income, as would anyone in an area where housing costs are high.

They are very keen to claim that one problem of the welfare system is that it looks at relative poverty (defined as 60% of the median earnings), and that instead we should look at measures of absolute poverty. For all the work they put into their research, however, they didn’t realise that the Joseph Rowntree Foundation has already done a lot of this work, developing a “minimum income standard based on what people said is needed to achieve an acceptable standard of living in Britain today”.

Instead, the Taxpayer’s Alliance use examples about how to measure absolute poverty taken from America. (It is worth noting that more taxpayers were involved in the Joseph Rowntree Foundation’s research than in this or most other pieces of Taxpayer’s Alliance research).

When the Joseph Rowntree Foundation asked people how much people in Britain needed to have an acceptable standard of living, the people came up with an amount which is far higher than the amount that the four (wealthy) authors of the Taxpayer’s Alliance report think is enough for millions of people to live on.

Just one small example of the principles underlying the Taxpayer’s Alliance proposals to reform welfare. They appear unconcerned with the problems caused by slashing support for families with children, or making people homeless when they can no longer pay the rent.

But they are very concerned about the lack of support from the welfare state for people who have assets over £16,000, and propose to scrap asset tests which reduce benefit payments for people who have lots of money saved.

So someone who has tens of thousands of pounds in the bank and who owns one or more homes will be entitled to receive more than £6,000 through their “negative income tax”, the same as someone who is out of work and who doesn’t have a penny in savings.

And if you think that is fair, you are probably rich enough to be one of the tiny number of people who the Taxpayer’s Alliance actually speaks for.

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About the author
Don Paskini is deputy-editor of LC. He also blogs at donpaskini. He is on twitter as @donpaskini
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Reader comments


“The way that it seeks to do this is by making lots of middle and lower income taxpayers considerably worse off.”

Well of couse, because they are a right wing astro turf bunch of phonies who are funded by the rich to help the rich.

“Taxpayer’s Alliance: take from the poor to give to the rich”

Or perhaps more accurately, “Take a bit less from the rich to give to the poor”

The benefit system certainly needs reform, not only is it very expensive but it is vastly overcomplicated, (at times a seemingly deliberate measure to reduce take up), and it does produce peverse incentives. Whatever should be done with the benefit system, simplification of both that and the tax system seems the obvious place to start.

I do think that concentrating on relative poverty can be counter productive, both in that it risks taking support away from those in truly desperate straights and in that people are far more likely to support help for those in dire need than those who just aren’t very wealthy. Re the MIS, it would be interesting to know their methodology in selecting participants and leading discussions for those who created the figures as well as geographical variations on the MIS itself.

OFF TOPIC but relevant to the previous post.

It has been announced that cop that pushed over Ian Tomlinson leading to his death will not be prosecuted.

quel surprise!

The Crown Prosecution Service say this is because “there is no real possibilty of his conviction due to conflicting medical reports”

BULLSHIT

If the victim had been a City financier in a suit instead of a newspaper seller in a football shirt this would not have happened.

There are loads of cases of fellas who punch another guy he goes down hits his head hard on the ground and dies of brain trauma

These guys are always prosecuted for manslaughter, it happened someone I vaguely knew in the 70s and he got four years.

Another establishment cover up, and a fucking disgrace

Donpaskini,

As far as I can see, the £16,000 limit is mentioned once on page 31 of the report. It is discussed as one design consideration in order to ensure that those who lose their income and have assets (but not the spectacularly rich, who I would have thought have much more in assets than £16,000) are not left destitute. That risk concerns us as it could put people off saving. That’s all. To pretend that is the main concern of the paper is absurd.

The Joseph Rowntree Trust report is a highly unscientific piece of focus group work. It is commendable that they’ve done it but it doesn’t establish an absolute poverty line. The absolute poverty line in the US – a richer country than the UK – is around the same as the 50% of median income line that we’ve used.

As for this point:

“There are pages of pseudo-scientific gibberish and hand waving designed to obscure this point, but the report couldn’t find any space to set out, for example, how many people would see their income reduced or by how much under their plans.”

You asked me a question about this on ConservativeHome. I answered politely but you appear to have ignored that. We put a lot of effort into developing a robust model for payments under a negative income tax regime that allows us to test changes in policy. Extending that model from the single benefit regime we were considering to the range of existing benefits is an entirely different challenge. It isn’t that we couldn’t find space – it’s that the current system is so maddeningly complicated (more than 8,500 pages of guidance for DWP benefits) that estimating its payments in a model that can adjust for policy is an extremely testing task and not one that was necessary for our purposes.

Some people would get less, though it is important to understand that the 50% of median income line we use is adjusted for household composition. Under our proposals the poorest – those in severe poverty under 40% of median income – would stop falling through the net, we would end the sky high marginal withdrawal rates that put people off work and we would no longer force claimants through a byzantine maze to get the benefits they are entitled to (which for some tax credits only 57% make it through).

That seems worth it to me. I understand that others would differ but instead of offering a reasoned argument that our proposals are wrong you’ve tried to slot this into your old stand bys attacking our authors’ motives.

Best,
Matt

Ah, a quick look at the list of authors reveals the name Mike Denham.

Denham, so-called “research fellow” of the TPA, also writes the original “Burning Our Money” blog under the alias of Wat Tyler. Here, he advocates warehousing the criminally inclined, perpetuates the paranoid concept of the BBC being in opposition to the Coalition (with the Guardian, a paper he hilariously nicknames the “Grun” (OK, it’s not hilarious) as its print arm), gets terribly worked up about immigration, although of course he’s not a bigot or a racist, and churns out lots of supposed “research” which often includes his own estimates in the calculations.

Who said “fiddling the figures”? Naughty people!

When I first heard of the “Taxpayers Alliance” I was suspicious at the name alone. Then I saw them on my local news trying to get rid of speed cameras on the basis that “they are there merely to generate revenue” – strangely they didn’t include in this analysis police fines for other illegal but non-lethal (unlike speeding) crimes such as, say, cannabis possession or burglary; no, just speeding (that most middle class and acceptable of crimes.)

And now this.

This is the Thatcherite wing of the tory party. The “Where’s my money?” and “Sainsbury’s bags on the front seat of my 4×4” Middle England bollox.

Tim,

Mike is an experienced former Treasury and City Economist and very well respected for being very good at this kind of thing. You may not agree with all of his views, and some of what he writes on Burning Our Money is tongue in cheek, but his empirical work is extremely robust.

Best,
Matt

“but his empirical work is extremely robust.”

Like his belief that whether crime is going up or down should be determined not by the BCS but by his own personal experiences of crime. Personal experience – sounds like a robust research method to me!!

@Planeshift,

It’s what keeps homeopathy and other quackeries in business, after all.

Incidently matthew – the link both on here and via your own website isn’t working – my browser downloads the pdf by nothing opens.

Hi Matt,

Thanks for the comment, I do think it is interesting that you decided that doing the calculations to find out how many taxpayers would lose out under your proposals was not necessary for your purposes.

TPA = quacks!

@7, When I see a Denham analysis that includes “BOM Calcs”, I know it’s utterly worthless – without proper independent verification. So much for his “empirical work”.

And someone who uses video from Glenn Beck, “star” of Fox News Channel (fair and balanced my arse) as some kind of exemplar isn’t likely to gain my respect any time soon. Neither does anyone urging abolition of the minimum wage (is that one TPA policy?).

BTW when are we going to see a full set of accounts and list of donors from the so-called Taxpayers’ Alliance (representing one tenth of one per cent of all tax payers), the organisation whose sole purpose is demonising Government?

mm, the complete lack of information about who puppets the TPA is quite irritating for me. I even went through some of their material to see if I could find out – not a mention.

I wouldn’t mind so much but despite my being a taxpayer, I’m pretty sure they don’t represent me – names are important, and they screwed up in that regard.

An article in yesterday’s Evening Standard about London Underground’s new training facility ended with a quote from TPA that it was a waste of public money. There was nothing to suggest that TPA had done any analysis about this. Perhaps, in some newspapers, articles about government projects have a featurethat automatic generates such a quote.

“When I first heard of the “Taxpayers Alliance” I was suspicious at the name alone. ”

This so prevalent in the USA. You get loads of these astro turf groups that call themselves some folksy name that sounds like apple pie.

Most organisations that has the word ‘freedom’ in it, you know will be a far Right wing outfit that wants to take away the freedom of most people. The taxpayers alliance would be more honest if they branded themselves the ‘Rich tax payers alliance.’ Or ‘Rich people who don’t want to pay tax.’

I much prefer The Other TaxPayers’ Alliance view on things.

The tea party is a classic new one. They are getting loads of coverage in the dim wit British media as some new group of pissed off voters. But poll after poll has shown that the vast majority of these people voted for Bush. It is the base of the Republican party, dressed up to look like something shiny new. They are funded by the corporations too.

Their big beef, supposedly is they want the govt to balance the budget. Funny they had no problem when Bush was running up the biggest deficits in history. Snake oil salesman the lot of them.

The point about the way the media cover them is an important one. The media make it very clear if a trade union brings out a policy or campaign what their politics are. But they are reluctant to point out the bias of these people.

@18 Sally

Spot on with your point about the media representation of the TPA. It’s always pretended like they’re some sort of impartial civil lib’s group whereas in fact they’re staffed by right wing Tory arseholes (as this article highlights). More needs to be done to expose them as the front that they are.

20. Charlieman

OP, Don Paskini: “But they are very concerned about the lack of support from the welfare state for people who have assets over £16,000…”

£16,000 is an interesting figure. Conventional wisdom is that working people should strive to have six months income in accessible savings, and I appreciate that this is a very middle class notion. But it turns out that £16,000 is roughly the net income for a couple on median wages over six months. It isn’t as much as it first sounds.

21. Matt Munro

@ 20 – Exactly, it’s peanuts, in terms of assets £16,000 will get you an average car, that’s about it. In terms of savings it’s just about enough to get maybe a year in an average Old Peoples home

22. Matt Munro

To give this some prespective what they were suggesting in essence was:

A citizens income to replace the plethora of mind boggling complex allowances and benefits.
and
A reduction from 60% of median income to 50% of median as the minimum standard of living that should be provided via the benefits system

Neither ideas are new – all parties have tried (and generally failed) to simplify the benefits systems, your own Mr Dillow is an advocate of the citizens income, and reducing the min by 10% is hardly radical or controversial.

23. Charlieman

@19 Mr S.Pill: “It’s always pretended like they’re some sort of impartial civil lib’s group…”

The TPA are very persistent. They knock out hundreds of press releases every year and have something (usually obnoxious) to say about all government activity. If you need a speaker, they’ll give you one. Consequently, they have received a lot of media attention over the last couple of years.

I think, fortunately, that the serious media have wised up a bit. Formerly, TPA press releases were quoted with little scrutiny, but they have been caught out a few times. Radio 4 news programmes, for example, no longer cover TPA stories in the fashion of a couple of years ago.

24. Cynical/Realist?

Last time I checked I was a tax payer. In fact today alone I’ve made 5 transactions which were taxable (get me doing my bit). Therefore, as a tax payer I request my alliance goes after the people who evade tax, what with this costing us other tax payers over 15 times the benefits bill.

But then again, I rather suspect that when the alliance God sent taxpayers isn’t sending out borderline racist, misleading and rightwing missives to the press they probably spend the the rest of their time evading as much tax as possible themselves.

25. Charlieman

@22 Matt Munroe: “[TPA proposal] A citizens income to replace the plethora of mind boggling complex allowances and benefits.”

I foolishly thought that when New Labour introduced Tax Credits it was a move away from complex benefit systems. How silly of me.

The Tax Credit policy was a reinvention of a 1970s Liberal Party proposition for a unified tax/benefit system. It is a small step from the old Liberal Party proposition to citizen’s basic income.

26. Matt Munro

Tax credits are not ostensibly a benefit. Gordo deliberately had them administered not by the DWP, but by Revenue and Customs, for that very reason. And they were never designed to directly replace anything.

“I hate buses… the symbol of a socialist society where people rely on the state for transport”

-Peter Roberts, founder of the “Drivers’ Alliance”.

http://taxpayersalliance.org/news/i-hate-buses-the-symbol-of-a-socialist-sociey

Again, you know exactly what the political line will be just from the name.

28. Charlieman

@26 Matt Munroe: “And they (tax credits) were never designed to directly replace anything.”

Tax credits were designed to boost the income of families with a modest income. To give families enough money that they did not require housing benefit or other form filling benefits. The reality of tax credits, alas, is that people have to fill in more forms when their employment changes.

Matt, you know and I know and Don Paskini knows that wibbling with the current tax/benefit system is silly. We need to kick it out of the park and start afresh.

29. Matt Munro

Agreedm but I would point out that families are entitled to tax credits on an income of up to circa £58,000. Hardly “modest” unless you are a hedge fund manager. The idea of inventing a new benefit to stop people having to cliam other benefits is positively kafkaesque. If you want to put more money in peoples pockets then change their tax code, easy, cheap and no forms to fill in.

30. Charlieman

@29 Matt Munro: “The idea of inventing a new benefit to stop people having to cliam other benefits is positively kafkaesque.”

The philosophy of Kafka is not required. The unforeseen (Right In Your Face) consequences suffice.

31. Arthur Seaton

The ‘ “Taxpayers” Alliance’ (there aren’t enough inverted commas and quote marks in the world to give appropriate warning for this snake-oil fraudulence of a name) – a front for a sordid pack of psychopathic hard-right ideologues and smirking soulless millionaires, many of whom of course pay no taxes in this country whatsoever. This shit-heated batallion of amoral scum should be treated with the outright and utter contempt they so completely deserve.

It is an attempt to simplify the benefits system and improve financial incentives for people to take a job, while reducing the overall cost of the system.

BASTARDS…………

@ Don

Sorry, but this is a straight forward hatchet job.

Instead of rubbishing the authors and the organisation that issued the report (in a well rehearsed reflex response) you would do better to engage with the detailed argument put forward and the moral, political and philosphical beliefs that underpin that argument.

Why should we use a measure of relative rather than absolute poverty as a yardstick?

Should we tax income or wealth?

Should we pay income benefits to those with assets?

Means testing or citizens entitlement?

They appear unconcerned with the problems caused by slashing support for families with children, or making people homeless when they can no longer pay the rent.

Oh yes.

If we don’t pay their housing benefit directly to the landlord they won’t pay the rent and will starve their children. They’ll just buy Stella and lottery tickets.

That’s weak and patronising, Don.

To be fair, I do like the idea of a universal “citizen’s allowance”-type scheme to replace benefits and tax credits and personal tax allowances. I suspect the major areas of quibbling are on whether it should be universal or not, and the exact amounts involved.

Back-of-fag-packet calculations based on 6K/child and 12K/adult suggested just giving everyone some money and if they waste it and starve to death, tough, the bill would be much higher than currently – somewhere in the region of 700 billion (benefits + pensions + tax credits coming to around 400 billion or so, I think).

I’m not sure unifying it into the tax system and having it on a sliding scale whereby it disappears after you’re earning a certain amount makes me a happy bunny, though.

@20 and 21 – homework for you – find out what percentage of the population have more than 16k in savings.

1% of the country’s population now have 20% of the country’s income (according to Radio 4 this morning)

Matthew Sinclair @ 7:

You don’t get to appeal to authority until you show your working.

Pagar @ 33

Not as weak and patronising as invoking the decade-old ‘chav scum’ stereotype to make your point.

Hi pagar,

“Instead of rubbishing the authors and the organisation that issued the report (in a well rehearsed reflex response) you would do better to engage with the detailed argument put forward and the moral, political and philosphical beliefs that underpin that argument.”

I did that with Policy Exchange and the Centre for Social Justice when they did research on welfare reform. The TPA report is shoddy partisan guff.

“Why should we use a measure of relative rather than absolute poverty as a yardstick?”

I think we should use both. It is interesting that the JRF research which seeks to establish an absolute poverty measure comes to a similar figure for the income required to avoid poverty as calculations of relative poverty using 60% of median earnings.

“Should we tax income or wealth?”

That’s not an either/or, surely? At the moment, I would be inclined to tax wealth a little more than at present.

“Should we pay income benefits to those with assets?”

I think it is absurd to argue, as the TPA do, that assets should be entirely disregarded when deciding eligibility to income benefits, particularly when this is combined with lowering income benefits for the poorest. I’m open to arguments about the possibility of basic income policies, though.

“Means testing or citizens entitlement?”

A mixed system – I think there is value in more policy development on a basic income, though I think there would still need to be some means tested support.

“They appear unconcerned with the problems caused by slashing support for families with children, or making people homeless when they can no longer pay the rent.

Oh yes.

If we don’t pay their housing benefit directly to the landlord they won’t pay the rent and will starve their children. They’ll just buy Stella and lottery tickets.”

You’ve misunderstood the point (my fault, as it wasn’t made very clearly) – the TPA system would cut the overall amount that people get, so that the benefits that they get would not cover the rent. It is not a question of whether it is paid to the landlord or tenant, it is that the NIT won’t cover the cost of the rent for many people.

39. Matt Munro

@ 38 “I think it is absurd to argue, as the TPA do, that assets should be entirely disregarded when deciding eligibility to income benefits, particularly when this is combined with lowering income benefits for the poorest. I’m open to arguments about the possibility of basic income policies, though.”

So someone who has worked and paid their NI and Tax for years and managed to buy a house (not that you could buy a parking space for 16K but just to illustrate) who then loses their job should be penalised ? We have a contributory system (National *insurance*) meaning you pay something in when you don’t need it and get something back when you do.

40. Chris Whitrow

Whilst I certainly wouldn’t trust the Taxpayer’s Alliance to design a fair tax and benefits system, the idea of replacing means-tested benefits with a negative income tax is one which the left should be embracing wholeheartedly. The details are of course vital if the proposals are to be fair, but it is certainly possible to design a system based on negative income tax which would lead to an end to the dreaded poverty trap and a decent minimum income for all. The only problem is that the wealthy, and many upper middle income earners would have to pay quite a bit more tax, in order to create opportunities for those lower down the scale. So, a system that was truly fair would be politically difficult to implement. But that’s a political, not a technical, problem.

I speak as someone who has had quite a lot of experience of being on benefits over the years, between jobs, and I know that the current system is deeply unfair, arbitrary and creates a major disincentive to find part time or low-paid work. The £16k asset limit is not necessary and only penalises saving. People with large assets will generate an income from those assets, which is taxable, so it’s just NOT true that the super rich would benefit from negative income tax: it will ONLY benefit those with an income below roughly (say) the median wage. The alternative is means testing, which always creates unnecessary bureaucracy and unfair arbitrary thresholds. This is why we have a universal health care system, which is not means tested. Should we say that anyone with more than £16k savings is not entitled to NHS treatment? Why should the concept of a basic living standard of income be treated any differently?

There are still some issues to address, however, such as housing benefit. Perhaps we should add a housing allowance to the income tax threshold and maybe that should depend on where people live. Also, some people do need more income than others, due to circumstances such as ill health. The details need to be worked out carefully, but in principle it is possible. If it were properly implemented, negative income tax could and should replace the current inefficient and unfair welfare system entirely, and the benefits to society would be enormous. Let’s not blind ourselves to the value of the idea, just because we don’t like some of the people who are advocating it, or the details of their proposals. The idea actually goes back a very long way, and was originally supported by those on the left.

“It is an attempt to simplify the benefits system and improve financial incentives for people to take a job, while reducing the overall cost of the system.”

I’m terminally ill and in enormous constant pain, pretty immobile, take heavy duty medications that make me ill, etc. I wonder what they would suggest as an incentive for me instead of a job?

Money off my cremation if I overdose on barbiturates (Dignitas style) so a kind of incentivised ‘final solution’ – diagnosis to grave as quickly as possible?

I’m being slightly flippant but do you see what I mean but this is the sort of dehumanising process that we’re (those on benefits/the poor) are going through. By treating us as a problem that needs to be solved they sound like Nazis.

I didn’t ask to be in this position, I didn’t get a choice so I think people should really think the government really need to think about this as a subject as it’s turned us (those on benefits/the poor) into the most openly cruelly discriminated against group in society.

I’d never thought that qualification to our society was based upon your ability to pay tax.

The poor are the last minority it’s ok to be prejudiced against. Anyone calling anyone else a snob is accused of the “politics of envy” or being stuck in the past.

43. Chaise Guevara

“The poor are the last minority it’s ok to be prejudiced against”

Would you say so? What about homosexuals and Muslims?

Actually, those two examples aside, I’ve always felt it’s considered more acceptable to make bigoted comments about those seen as being advantaged: the rich, the posh, the white, the male. This isn’t one of those stupid “white men are the most discriminated-against group” rants, I’m merely saying that reverse snobbery (and things like it) tend to be more socially acceptable than traditional snobbery.

@43

Hm, maybe I was being too flippant: I just think that if you are prejudiced against gays or Muslims there are plenty of people to call you out on it (Stonewall and the MCB, for example) whereas if you’re prejudiced against the poor there are not that many people willing to put you right.
Since the myth of “we’re all middle-class now” has spread like wildfire people are more inclined to think of the poor in an abstract negative sense (hence the stereotype of the chavs etc) rather than human beings in unfortunate circumstances.

Saying all that, I’m probably just pissed off due to an unproductive visit to the Job Centre today…

Oh and the rich white posh male might find himself up against a lot of prejudice, but he has every tool in the power-box of the state, media and corportate interests at his disposal to protect himself.

Hi Chris,

Thanks for your comment – agree with all of that. There is quite a lot of difficult policy work involved in coming up with a negative income tax which would lead to an end to the dreaded poverty trap and a decent minimum income for all, though.

The Green Party has a basic income proposal which costs £70 billion more than the current welfare system and gives an extra £30/week to wealthier pensioners while giving nothing extra to unemployed people – and that’s probably the best current proposal from any political party at the moment.

47. Chaise Guevara

“Since the myth of “we’re all middle-class now” has spread like wildfire people are more inclined to think of the poor in an abstract negative sense (hence the stereotype of the chavs etc) rather than human beings in unfortunate circumstances.”

The word ‘underclass’ does turn up with annoying frequency, I grant you.

48. Chaise Guevara

“I didn’t ask to be in this position, I didn’t get a choice so I think people should really think the government really need to think about this as a subject as it’s turned us (those on benefits/the poor) into the most openly cruelly discriminated against group in society.”

A huge part of this problem is the fact that the poor are less likely to vote, which obviously can be factored in when parties decide whose interests to protect.
There’s also a positive correlation between income and intelligence/education/world knowledge, for obvious reasons (talking about groups here, not individuals), and I’m guessing that smarter, better educated and more well-informed people are less likely to be tricked into voting against their own interests (see Thatcher).

@47

Re:”underclass”

Well, quite. It was even used on Question Time the other week and even George Galloway didn’t challenge the concept.

Don

Thanks for the engagement- I knew there was more to come from you on this.

I did that with Policy Exchange and the Centre for Social Justice when they did research on welfare reform. The TPA report is shoddy partisan guff.

Have to say I found it pretty coherent. I can understand that there were bits you would not approve of but you have to accept it is radical. Were I a mischevous sort and Paul Sagar was on holiday I might call it progressive.

It is interesting that the JRF research which seeks to establish an absolute poverty measure comes to a similar figure for the income required to avoid poverty as calculations of relative poverty using 60% of median earnings.

OK. So we need not argue about this. The TPA figure of a 10K entitlement per head fits in with this.

At the moment, I would be inclined to tax wealth a little more than at present.

Accepted.

I think it is absurd to argue, as the TPA do, that assets should be entirely disregarded when deciding eligibility to income benefits

The problem is when you complicate the system by not paying out where people have assets, the administration becomes much more expensive. Also, it discourages prudent saving and encourages people to hide their wealth. It makes the system inherently unfair and you can achieve the same effect by taxing wealth more.

I think there is value in more policy development on a basic income, though I think there would still need to be some means tested support.

Surely that depends on the level of payment. You would surely not argue that if CBI were £50,000 per annum there would be a need for means testing as well. What about £20,000? Or £15,000?

You will now argue that such figures are ludicrously unaffordable but remember that the money can be recovered from everyone who has a reasonable income through a graduated income tax system. And I know this is a little more radical than the TPA were proposing.

It is not a question of whether it is paid to the landlord or tenant, it is that the NIT won’t cover the cost of the rent for many people.

Then it needs to, otherwise it wouldn’t work. The payment of housing benefit only benefits rich buy to let landlords who syphon off taxpayers money in a rigged market. A true market in the rented sector (and that also means an end to local authority social housing) would benefit the poor, not the rich.

I am aware that many here hold a deep antipathy to the TPA but ideas should be treated on their merits, not on where they came from.

I’m open to arguments about the possibility of basic income policies

Great.

Let’s explore them because the current system of mutiple means tested benefits isn’t working.

51. Chris Whitrow

I must just point out that it’s very difficult to make accurate estimates of how much additional cost would be incurred by a welfare system based on negative income tax. I would therefore be skeptical of the £70 billion figure attributed to the Green Party proposal, for example. I believe this is likely to be an overestimate, since it is not known how many more part time jobs would be created by the implementation of a minimum income. These extra jobs, which would undoubtedly be created if the poverty trap could be alleviated, would lead to a considerable reduction in costs.

To give you an example, I currently work 2 days a week part time and need to claim housing benefit in order to make ends meet. If I were to work one extra day, I would lose all my benefit entitlement at a stroke, making me worse off. My marginal tax rate is therefore well over 100%! And the rich think 50% is a disincentive!! That’s the pernicious effect of the poverty trap, which is the result of means tested benefits and the arbitrary rules that go with them. A negative income tax would sweep this nonsense away, and allow millions of people to do productive part time work, helping themselves at the same time as reducing the welfare bill: very much a win-win. Also, there would be no need to coerce anyone to look for work. The whole notion of coercion was always preposterous, but when people have genuine incentives, it will soon be seen that they will take them, just as they do in Holland, where welfare payments are much more generous and yet unemployment is much lower than here.

However, there’s no denying that some people (possibly most people) will have to pay higher taxes in order to fund a minimum income system. I would start by putting corporation tax up to the G7 average (around 36%). We can afford it, but it would be politically very difficult. People only see the costs, without understanding the enormous benefits.

That’s the pernicious effect of the poverty trap, which is the result of means tested benefits and the arbitrary rules that go with them.

Indeed.

Not to mention the enormous costs in administering such a failed system. I sometimes think that some of the resistance to streamlining the benefits system comes from those with a vested interest in maintaining it’s complexity.

Great idea you cut benefits to the min or below to get the disabled and the poorest back to work, lets see would I be able to go back to work nope, for some reason my legs would still not grow back.


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  1. Liberal Conspiracy

    Taxpayer’s Alliance: take from the poor to give to the rich http://bit.ly/aix0JF

  2. Don Paskini

    RT @libcon: Taxpayer’s Alliance: take from the poor to give to the rich http://bit.ly/aix0JF

  3. Rezina

    RT @libcon: Taxpayer’s Alliance: take from the poor to give to the rich http://bit.ly/aix0JF

  4. Niall Millar

    RT: @libcon: Taxpayer’s Alliance: take from the poor to give to the rich http://bit.ly/aix0JF

  5. andy c

    RT @libcon: Taxpayer’s Alliance: take from the poor to give to the rich http://bit.ly/aix0JF

  6. gemma tumelty

    RT @libcon: Taxpayer’s Alliance: take from the poor to give to the rich http://bit.ly/aix0JF

  7. Mark Curry

    RT @libcon: Taxpayer’s Alliance: take from the poor to give to the rich http://bit.ly/aix0JF

  8. Other TaxPayers Alli

    Very good: RT @libcon: Taxpayer’s Alliance: take from the poor to give to the rich http://bit.ly/aix0JF

  9. Josh Eades

    RT @libcon: Taxpayer’s Alliance: take from the poor to give to the rich http://bit.ly/aix0JF

  10. BendyGirl

    RT @OtherTPA: Very good: RT @libcon: Taxpayer’s Alliance: take from the poor to give to the rich http://bit.ly/aix0JF

  11. Tim Beadle

    RT @OtherTPA: Very good: RT @libcon: Taxpayer’s Alliance: take from the poor to give to the rich http://bit.ly/aix0JF

  12. Speedy Russell

    RT @OtherTPA: v.g.: RT @libcon: Taxpayer’s Alliance: take from the poor to give 2 the rich http://bit.ly/aix0JF > Is Dennis Moore in charge?

  13. Speedy Russell

    RT @OtherTPA: v.g.: RT @libcon: Taxpayer’s Alliance: take from the poor to give 2 the rich http://bit.ly/aix0JF > Is Dennis Moore in charge?

  14. Ralph Ferrett

    RT @OtherTPA: Very good: RT @libcon: Taxpayer’s Alliance: take from the poor to give to the rich http://bit.ly/aix0JF

  15. Mark Best

    RT @libcon: Taxpayer’s Alliance: take from the poor to give to the rich http://bit.ly/aix0JF

  16. Laura

    RT @libcon: Taxpayer’s Alliance: take from the poor to give to the rich http://bit.ly/aix0JF

  17. The TaxPayers’ Alliance: Not Entirely Wrong | Bright Green

    […] (TPA) have a new report on welfare reform. Don Paskini’s already had a review of it over on Liberal Conspiracy. He makes some interesting points but I think in his rush to rubbish anything the TPA come up with […]

  18. Peter Anghelides

    Why does Telegraph quote "Taxpayers Alliance" without saying what kind of unrepresentative pressure group they are? http://is.gd/dI0Im #fb





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