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Tax and benefits
Frogmarch 2002 - Whitby
There is a furore (among the media at least) over the government’s plan to stop child benefit where at least one parent is a higher-rate tax payer. I think it is a progressive reform that should be welcomed. I find it hard to justify universality of benefits; those with high incomes should not be receiving cash from the state, if for no other reason than that it must be highly inefficient for the government to take money away from us in tax only to give a fraction of it back as a benefit.

I would take the principle further, and state that nobody who pays income tax should receive cash benefits, just as I think that those who live on benefits shouldn’t have to pay income tax.

Perhaps a little more awareness of how much tax we pay would help those complaining about the change to put it in perspective; for most taxpayers the child benefit they receive is dwarfed by the amount of tax that they pay. PAYE does a very good job of hiding one’s tax payments; the money doesn’t reach one’s bank account, so one doesn’t miss it.

Years of writing my own PAYE and VAT cheques has made me very conscious of exactly how much money the government takes from me. I think that as a nation we’d have a very different attitude to the level of government spending if we had to pay income tax out of our own bank accounts.

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So from that I conclude that Beth's child benefit has been secretly funding Kate's People's Friend and Curly Wurly habits...

I didnt grow up here as you know, and I am not sure about how everything works here, but I feel on this I need to comment.

Because my parents made what you would call a high tax rate I could not qualify to get a student loan when I went to college. Therefore I had to work my way through college. I could not go to a University, but instead a Community College.

I would hate to see that happen to Keith. Just because people worked hard to get where they are and have more money, does not always mean that they have money free to spend. It is usually tied up in debt in some way. And usually when they do tax programmes like that it is usually the upper middle class that suffers, how is that fair?

As for people on benefits in this country, I have seen QUITE a FEW that are on them that do whatever they can to stay on them because they are to lazy or proud to work. As for the 250gbp that Keith got when he was born, that is his, not ours to be used for his education when he is older. We put money away in his account when we can. Again for his education when he is older. I know some people think of my situation with my husband and think that we have money to throw around, but the fact is we budget just like everyone else. I had to put things on hold to take the trip that I just recently took to the states. Had I not had friends and family that were able to put me up, I would not have been able to afford the trip. That is a side bar issue.

What angers me here is so many people claiming benefits and fraud the government. People could make it work to live life without being on benefits here. I see people posting about not being able to work, because they have no childcare, yet they find it when they want to goto a club or some gig. I see people claim they cant work because of some disability or depression yet they are out and about in town or at the park, or in one case I saw someone moving furniture! I have heard from woman I know that when they were in hospital giving birth they overheard another mother getting schooled by her mother NOT to put the father's name on the birth certificate so she could get more in benefits.

Personally, I think anyone on benefits should be held up to standards that the average person does when they go for a job, say random drug testing for example. Also set up programs to get people OFF benefits and help them to be self sufficient. Oh, and what about prevention programs?

Again, maybe I need to research more on the political side of things rather than base my opinions on what I have seen around where I live and people I have met. It just gets the blood boiling a little bit for me.

Sorry for going off tangent a little Toby!

It is certainly iniquitous that students, who when over eighteen are otherwise regarded as adults, can receive funding, loans, or special treatment based on the income of their parents.

My point exactly. My parents income shouldnt matter when I no longer lived in there home. I was on my own, paid my own taxes, yet got denied based on their income--not my own at the time. It was very frustrating.

I agree there - your benefits, student loans really shouldn't be calculated depending on your parents' income - but that isn't an issue here; the "controversial" change (actually supported by 80+% of the population, but the media seems to want to pretend there is a controversy) affects a benefit which is paid to the parents - currently paid regardless of their income. Right now, every parent gets this welfare payment simply for being a parent, regardless of income, which just seems wrong to me. If this benefit actually went to the child, like the 'Child Trust Fund' payment, there would at least be a reasonable argument against making it dependent on the parents' income, but that isn't the case here.

Indeed, at first my mother had assumed she wouldn't be eligible (my father had a well-paid job with AMI, a big US health care company, at the time) - the notion of having the government hand out welfare while it also extracts a much larger amount of money from the same pocket in tax is just absurd on so many levels.

The other proposed reforms seem very positive (as well as long overdue): capping welfare payments at a figure which is still outrageously high, and changing policies to avoid the "gap" whereby a welfare recipient can be better off staying on welfare than taking a job. It will probably take years for this to have a detectable effect overall, but it's certainly a step in the right direction. It's far from ideal - for one thing, joint tax returns would really need to be in place for this to work properly - but it's going in the right direction at least.

There are big changes afoot for benefits. The announcements in the past week suggest that we'll be facing the biggest changes to benefits since the welfare state was introduced in the 1940s. It even seems that IDS has cross-party support for his plans.

Maybe you should sacrifice a little of your time on your Xbox to watch some political television instead - let me recommend The Daily Politics (weekday lunchtimes on BBC2, with an extended prog on Wednesdays to cover PMQs), and Newsnight (10.30pm every evening on BBC2). Who knows - with exposure to serious political television, maybe Keith will grow up with an interest in politics!

It isnt like you Toby to make a snide remark.

As for TV, when I have time to watch it, much like anything else including the Xbox you think I live on, I will.

As for Lilbuff, I intend to teach him work ethic, the value of budgeting, and self reliance. Here are some things I was taught: If you dont need it, dont use it! And my favorite from my Grandma: treat every job you have with pride, as if you owned the company.

If Lilbuff has an interest in politics, religion or anything else, I hope that he fosters change that is good for everyone, not just a select few. I dont believe in discriminating those who have, just as much as I dont like it against those who dont.

If this is as touchy a subject for you as it is becoming for me and it cant be a positive discussion than maybe I will step back and say I guess we will have to agree to disagree...

Haha, it wasn't intended to have anything other than a surface sheen of snideness; just based on observation that you, certainly in the past, have written on Facebook about how much you play on the Xbox.

I'm used to Kate complaining when I watch anything political on TV. At lunchtime today the conference coverage on TV was enough to encourage her to leave the room and do some laundry!

agree 100% with you I was lucky enough to be insured when I had the accident so the fact that I still get a £1000 a month from the government I think is a joke (I'm not stupid so I'll not look opportunity in the face and I'll save the money for Andrew) and if Jan gets the regrading at work she'll move into the high tax bracket where I was before the accident but my attitude is it's going to cost too much to deal with those cases where 2 parents who work make more than 1 than who looses the benefit so be it, the world not perfect there will always be losers and gainers and taking it away from high rate tax payers will save the government a shed load of money so for it government

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