Dear Dave: pay child benefit to all regardless of income, and save a packet

How?
Just add a small amount to income tax to cancel it out.
Then - get rid of all the extra pencil pushers who would otherwise be
needed to decide if the family passes some means test to get it.
Result is a net saving in administration.
In fact, why not pay unemployment benefit and all the other benefits to
everyone, and then take it back in taxes (VAT and income tax) - even more
savings!
Simples
Reply to
johnboy
I didn't vote for him either ;-)
I think it's daft to have separate taxation and benefits systems. It's less effecient a more prone to error.
Define a minimum income. Anything above this gets taxed. If income is lower the rest is made up by applying a negative taxation rate.
Reply to
Mark
Trouble is, there's no incentive to work if you get an income regardless. That's why we've got so many scroungers, particularly from abroad.
And shouldn't high earners pay more tax proportionately? If not, will we ever get the deficit down?
Rob Graham
Reply to
Rob Graham
Child benefit is and always has been paid regardless of income.
What you probably mean is child tax credit.
Yup. None of them will ever do it though. It would mean a very large rise in income tax rates which all governments seem obsessed with lowering because people are stupid enough to think low income tax rates means low taxes. Even after Gordon the moron proved them wrong again and again with all his stealth taxes.
Reply to
Andy Pandy
No, there's no incentive to work if you don't gain anything from working because you lose all your benefits. Means testing discourages work. What the OP proposed was not means testing benefits, so those who get up off their arse and get a job will be better off than the "scroungers".
Reply to
Andy Pandy
Nor did Gordon, so I presume you didn't vote for him either then. Nor did Nick. Nor did any other party I'm aware of propose it. So, who did you vote for?
Reply to
Andy Pandy
My reply was to Mark rather than the OP. Mark's suggestion WAS a means testing of a sort because you get above or below a minimum income and this then determines an addition or a subtraction from your income.
Rob
Reply to
Rob Graham
I don't think that there is the slightest chance of it being means tested by income for precisely this reason.
Because there would be a ('n even larger than there already is) subset of people who would decide that there was no need to work for a living
tim
Reply to
tim....
Au contraire - I meant child benefit. There is a groundswell of opinion to get it means tested. This would add to admin costs.
What I would like to propose is that all allowances / benefits / credits are scrapped and that instead every adult UK citizen gets paid a fixed sum by govt every year. Call this A (it'd be around £5000 each). All other govt handouts would cease.
At the same time, the tax system is changed so that everything is taxed at the same flat rate - that's income tax and VAT. Call this X (it'd be around 20%). In future VAT would apply to ALL purchases. The budget would have to be drawn up to decide what that rate needs to be, to balance the exchequer and pay off our national debts. All personal tax allowances are abolished.
The incentive to work would be there for everyone: Simply put, if you want more than the basic allowance, then go out and get it.
The simplification would be enormous - How much is your tax bill? well its 20% of all your earnings. No need to have armies of experts sorting it out.
There would be no exceptions or loop holes. e.g. If you decide to have 10 kids, you'd better get a job, because the state would not be picking up the tab for more than your £5k / year.
A left wing govt might be inclined to have a high A and a high X. A right wing govt might cut both.
Like all great systems it has an elegant simplicity.
Potentially a huge one actually!
Reply to
johnboy
From what age?
Including convicted murderers and pick-pockets?
So I have to be VAT registered to sell my kid's bike to my friend? And keep the VAT receipt showing the Input VAT when I bought it 5 years ago?
Similarly for my house?
Except for the handful of people who check the resulting 40 million VAT returns every 3 months.
What are "earnings"?
Do you mean my village shop-keeper's total takings, with no allowance for his purchases and other costs?
Will universities have to pay 20% tax on their fee income?
What about the money I get from my insurer after my car's been stolen? (I already paid 20% VAT on the premium).
I wasn't aware this country has an army of anything approaching "experts", so where's the saving?
Actually, £10k / year if I remember my biology correctly.
Until you stop and think about it.... And discover that, like all "great systems", it's unworkable.
IMHO, of course...
Reply to
Martin
In message , Martin writes
I would assume he means whenever they leave education which would be 16+
Only if they then had to pay 5k p.a. for their keep whilst detained at Her Majesty's pleasure.
I hope not otherwise that would defeat the concept of simplicity.
There would be little unemployment then :-)
Probably the balance of income after deduction of allowable expenses.
Hope not, he should be allowed to deduct cost of purchase etc.
Seems fair.
Exempt.
I thought that most of the experts are on usenet and unpaid :-)
AOL
It is good to think outside of the box though and there is some mileage in exploring such ideas. I never have understood why we pay some people more to stay at home and/or breed umpteen children that they cannot afford to have and give them more than they could earn if they were employed doing something constructive.
Reply to
Paul Harris

There is a kind of implied "means testing" in my system but it is only done once rather than multiple times for every single benefit.
To respond to your previous post in this thread I don't believe that my system would reduce the incentive to work. Anyone working will get more money than someone not working. Isn't that enough motivation?
The tax rates can still be graduated so that the richest pay more (and the poorest get more).
In fact I really don't understand why there is so much hysteria about "scroungers". Unless someone is fiddling the system they can't get a reasonable standard of living without working, can they?
Another issue is that, in attempt to hurt the "scroungers", any measure taken is likely to have an adverse effect on the poor who are genuinely unable to work. And there are far more of these than the "scroungers" IMHO.
Reply to
Mark
You don't need to fiddle the system. You just have plenty of babies, viz Karen Matthews, to quote one example in the news.
Rob
Reply to
Rob Graham
Not really - if they merged it into the CTC which is already means tested the admin is all already there. They could increase the CTC by the CHB rates, and possibly remove or bring the family element of the CTC into line the withdrawal rules for the rest of the CTC and that could *reduce* admin costs (as less people would be eligible).
A "citizen's income". It's a good idea, I've argued for it.
It would have to be much more than 20%. I think I worked it out income tax would have to be about 45% or so last time I did it, assuming other taxes stay the same.
Yup!
Eh? No "child benefit", which you were arguing for paying non means tested? You'd need an amount for children, otherwise those who don't provide the next generation of taxpayers to pay their "allowance" when they're no longer paying taxes would be sponging off the kids of those who did.
Indeed.
Yes.
Reply to
Andy Pandy

Depends what you mean by reasonable. A family on the dole generally gets about 90% of what they'd get on a single average income (I've provided the figures many times).
Virtually everyone is capable of some sort of work, the problem is that the benefits system (and to some extent employment laws) can't cope with someone who can perhaps only work intermittantly, who may need short or long periods off etc. For such people and their employers, the massive hassle involved is simply not worth the effort of trying to work, coming off and on benefits, sorting out employment admin (eg holiday, sick pay etc). So they don't bother.
With a simple "citizen's income" and a flat tax rate, going in and out of work frequently, working intermittant hours etc would not be a problem.
Reply to
Andy Pandy
In message , Mark writes
[...]
I have been wondering if anyone here actually knows any "scroungers". I don't, though I have had problems with tradesmen who, when asked for a receipt, say: "I can give you one if you like, but then I'd have to charge you VAT". By implication, they must have a sizeable business to have to make a VAT return (AIUI), so they are part of the black economy.
Cameron/Osbourne are using the alleged "extravagance" of the last government to make the kind of cuts they were going to make anyway. You can't go on paying invalidity benefit and at the same time restrict the poor CEO's bonus increases to only 17%, and their pay increases to 7%.
That's only double the inflation rate, poor devils...
Reply to
Gordon H
Absolutely right. Although you do have to have some system that prevents the world and his dog coming to the UK simply to cash in.
But it raises the headline rate of income tax and politicans are all scared of doing that.
Robert
Reply to
RobertL

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