> One of the few good things Brown did, although the amounts
involved
> are small.
> > The problem is Brown doesn't "get it". I am reminded of the phrase
> > used on "In The Thick of It" when a politician was described as
> > "disconnected to the point of autism". He keeps on about his schemes
> > for families, as if single people on minimum wage should be
funding
> these. Then he devised a compensation scheme which doesn't appear to
> > compensate the main losers.
> >
> He is also increasing the VED on family sized cars. You could say it is
> fairer to increase the tax on families in order to pay for benefits to > families.
Is it bollox. But that is how it works - basically the way the overall structure of taxation and benefits works in this country is that average/above average income families, not childless people, subsidise low income families.
It would be fairer if childless people subsidised low income families, as people who have children are already providing the taxpayers of the future to subsidise them in their old age, childless people aren't.
Because people are stupid enough to believe the government spin on how generous they are to families. And journalists, even financial journalists, don't understand the tax credits system. Even usually reliable sources of information like Motley Fool have written utter rubbish about tax credits.
An average size family on an average household income has seen their tax credits fall year on year in real terms every year since the new tax credits started in 2003, as both the family element and the threshold for the family element have been frozen since then. Most would be better off with MIRAS and the married couples/additional personal allowance, which were abolished by this govt.
Eh? How are families subsidising them more than childless people subsidise them, if both the family and the childless couple get the same household income?
We've had this conversation before. Let's try a new angle.
Tell me Tim, do you think people should be treated as individuals by the tax & benefits systems, or do you think couples and families should be treated as a single unit by the tax & benefits system?
Obviously old people benefit from the taxes paid by the younger generation whether or not they've had children.
However, those who had children subsidised the creation of that younger generation to a far greater extent than childless people, through the costs of bringing up their own children, in addition to the taxation paid by both groups.
So in 30 years time, why should my children's taxes pay the same towards some childless person's state pension, winter fuel allowance, healthcare costs, bus pass etc, as they do to mine? I've invested much more in the next generation, so why does someone who didn't invest as much get the same reward from them?
Perhaps we should move towards the German model, where grown up children are expected to look after their parents in their old age, including financially subsidising them, in the same way as their parents looked after them and financially subsidised them when they were young.
Agreed - although of course the benefit received by each individual (assuming of course that they actually live to enjoy "old age") will vary depending on their needs and their own personal financial resources.
Indeed, but this model assumes that the parents of children receive no extra "benefit" from their existence over and above the taxes these children will pay to keep their parents in old age. Obviously, that is not the case.
If you genuinely consider your children to be nothing more than an investment in your financial future perhaps an you should keep accounts through their formative years and ask them to pay you back as soon as they are able - that way you are sure to get your monies back!
And out of interest, under your scheme, would childless people get a refund for the money spent on children who turn out to be wasters?
Well, my family *does* offer financial support across the generations - why would it not? But then we see each other as loved ones we want to look after and protect rather than just people who are subsiding or being subsidised with a view to securing a future financial pay back. I do not believe we are unusual here.
That said, our system of pensions (no idea how this works in Germany) allows a degree of financial independence in old age that I would not personally begrudge a single one of them - whether they have children (imagine having to get your pocket money from your children and what if they won't cough up!) or no children through choice or no children through circumstance (infertility and bereavement spring to mind).
I can't see this working here. Owing to rocketing house prices and other factors wealth has effectively moved towards the older generation. It's the elderly that need to look after the young financially ;-)
Yes, of course many other factors will affect what their net subsidy from the state is in old age.
Nope. This is a financial discussion and I'm only looking at the financial issues. In the same way as the cluess whingers who whine "why are my taxes paying for other peoples' children?".
In this country it clearly makes absolutely no financial sense to have children (unless you're on the dole, intend to live on IS, or have a very low income, and will remain so until your children have grown up). Obviously there are other benefits to having children which is why people do have them.
allowance,
accounts
As above, this discussion is about the financial issues, nothing more! In fact, if cross-generation subsidy was repaid, we could abolish things like state pensions, higher allowances for old people, winter fuel allowances etc.
Would mean childless old people who hadn't saved would be in extreme poverty.
No more than they'd get charged extra for those who became high flyers contributing hundreds of thousands in tax.
generations -
Yes, and? The point is in Germany it is *compulsory* in some cases. Eg paying for care homes I believe.
And childless people apparently get charged *extra tax* to make up for the fact they haven't provided children who can help them out financially in old age!! Perhaps we should have the same here, that'll get the clueless "why should I pay for the next generation" whingers wound up even more!!
Germany)
children
Agreed - I'm not really suggesting that old people are directly subsidised by their children - merely using it to illustrate the point that, as a society and through taxation, that is what happens. Which is why since people with children will be contributing financially to the next generation more than people without children, the least they should be entitled to is a system like in France, Spain or America, where non earners in a family get a tax allowance which they can use against the income that supports them.
It doesn't really matter either way to the question I posed, now does it? The comparison between families or childless couples subsidising low income families is solely related to the level of "tax less benefits" borne by the household of the family or the childless couple. Now, assuming the same income profile across the couple/parents (the children of the family are assumed not have any earnings) - do you think that the family pays more tax, or receives less benefits, than the childless couple?
If you'd like to put some figures to it, suppose (say) that the parents of the family earn 40Kpa and 25Kpa, and that the childless couple earn 40Kpa and 25Kpa also. How does the family subsidise the low income families any more than the childless couple? In fact, doesn't the family receive more benefits and hence actually subsidise them *less* ?
If you can't back up your original assertion, then just say so, and we'll know to ignore your earlier comment.
We already do, effectively... We can consider "net taxation" to be "gross taxation" less "benefits". Instead of increasing the "gross taxation" on childless couples (as in the system you describe in Germany), the UK instead reduces their "benefits" (ie they don't get as many benefits as families). Both ways, for Germany *and* the UK, the "net taxation" of childless couples is therefore higher...
We can consider there to be three rough categories of person:-
(1) The "average" person, who pays roughly the same level of taxation over their lifetime as they receive in state benefits;
(2) The "high-fliers", who pay more tax over their lifetime than they receive in state benefits; and
(3) The "low-income" people, who receive more in state benefits over their lifetime than they pay in tax.
You are assuming that all your children come under category (2). That certainly can't be true for *all* families!
So, the state will benefit from those parents who produce offspring in category (2), will *suffer* from those parents that produce offspring in category (3), and will not be affected by *either* parents who produce offspring in category (1) **or** childless couples.
In other words, parents are taking a gamble as to whether their children will benefit the state or burden it; whereas childless couples won't benefit or burden the state with their offpsring.
Yes, assuming the same number of people in each household.
You're not comparing like with like. You may as well compare a household with 4 adults to a household with 2 adults.
You need to compare, say, a family of 4 with a group of 4 single adults.
So let's compare a family of 4, where both parents work, with 4 single adults, where only 2 of them work and the other 2 earn nothing.
No. Because a group of 4 single adults, where 2 of them work and the other 2 don't, will get *considerably* more in benefits than a family of 4 on the incomes you quoted. In fact probably around 10k more. Both groups will pay the same tax. Hence the net subsidy paid by the family is far greater.
Yes, but you're missing the point. It's not about the overall benefit/burden on the state, it's about the transfer of money and cross subsidy between generations.
If everyone had 2 children, there wouldn't be a problem whatever the rules/taxes/benefits & commonly accepted practice were. Provided the rules/conventions stayed the same everyone would benefit by as much they subsidise.
But if some people don't have children, then they have received subsidy from the state and their parents when they were children, but have only returned the subsidy to the state (and some even begrudge that!), they haven't returned the direct parent-child subsidy. Therefore they have "borrowed" more from the previous generation than they have "paid back" to the next.
This problem can be solved by reducing the direct parent-child subsidy, and increasing the state-child subsidy. Tax credits do this - but only for low income people, in fact they overdo it for low income people (due to silly "child poverty" targets which use bullshit measures). But for average income people, the parent-child subsidy is massive due to trivial benefits and independant taxation.
Really? Is an 18 year old comparable with a 60 year old? Anyway we digress, I'll go along with you....
OK.
The two orphans are presumably being looked after in a state care home, paid for by taxes. The net subsidy therefore received by the group of childless couple plus orphans is therefore far greater than that received by the family of 4.
In which case, your production of children will neither benefit nor burden the state, just like the childless couple's non-production of children.
"Andy Pandy" wrote
I'm glad you finally agree that you were wrong!
"Andy Pandy" wrote
Hmmm, that's strange. When you said "... why should my children's TAXES pay the same towards some childless person's STATE pension, winter fuel ALLOWANCE, healthcare costs, bus pass etc", -- why did you only mention *state* benefits/burdens??
"Andy Pandy" wrote
Well, if you are concerned only about *direct* subsidies, not subsidies via the state, then you shouldn't have only referred to *state* benefits/burdens!
"Andy Pandy" wrote
So their relationship with the state is neutral - the same as the average for parents.
"Andy Pandy" wrote
That's got nothing at all whatsoever to do with *state* benefits/burdens, which is what I questioned in your comment.
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