To my pleasant surprise, today's leader in The Times lays into the latest Tory election gimmick and concludes thusly:
Hypothecation — allocating the revenues from a particular tax to a specified purpose — is a bad idea in principle. This example of it is social engineering on a scale inconsistent with modern mores and the values of a free society. In a long philosophical journey in Opposition, the Tories appear to have alighted on moral authoritarianism advanced by economic interventionism. These are the wrong answers.
This policy is worryingly confused. At a time when the main message of the Conservative campaign is that there is no money, it is odd indeed to be offering handouts.
What the article doesn't mention is that the £3 a week break for married couples with only one earner pales into insignificance against the £224 a week incentive for couples to live apart (and by extension, not to get married).
UPDATE: having now read the print edition in the back garden while it was still a bit sunny, George Osborne makes exactly that point in a two page interview: "We currently have a tax and benefits system that actually splits people up.”, although he does not explain how the Tories would sort out this far more important issue. A pity the leader writer didn't read the interview first.
Anecdotal: while on the campaign trail, I was reliably informed that there are even some pensioner couples are are pretending to split up, for the simple reason that the Pensions Credit for a single pensioner is £133 but for a couple is only £202, so you can gain £64 a week (assuming both partners have actual or deemed income below the Pensions Credit level) or up to £130 a week (if one partner has a lot of income in his or her own name but the other has no little or no State pension or savings), plus 25% off your Council Tax (another £6 or £7 a week) by pretending to split up.
A grim document
15 hours ago
6 comments:
The pensions credit should be £266 for a couple. Or £101 for a single person.
The problem arises because socialists try to manage outcomes (two can live nearly as cheaply as one) rather than provide equal opportunity.
If both parties have paid sufficient contributions, why should the state steal £64 from one person?
john miller,
no, the pensions credit should be £x for 1 person, £x2 for 2 people. Whether they're married, co-habiting or just "friends with benefits".
JT, I think that's what JM meant. The answer should be that the pensions credit (or any other form of welfare) should be £x per person or £y per child, regardless of anything else (up to a certain number of children per family to prevent 'baby farming').
I would rather like more hypothecation since it makes a particular group directly responsible for getting value. Normally most taxes just go in to the Exchequer & come out according to who has the political pull. The main problem is that taxes promised as hypothecated (National Insurance as insurance, Road tax for improving roads & the nuclear disassembly fund) haven't been but this is an argument for law binding the government as well as us. I suspect if the NHS were funded from a set proportion of income & alcohol taxes with the right to increase/reduce these taxes by referendum we would have more intelligent debate on the subject.
NC, yes, if we hypothecated fuel duties to roads and transport that would be a sensible thing to do (it would be easy to see by how much the motorist is being fleeced - or not as the case may be), and if all new goods had a 1% "waste disposal tax" added that would be sensible as well (certainly more sensible that landfill tax - the tax collected exceeds the value of the land used for landfill by several thousand per cent).
But the Times leader was written in the context of a 'tax on banks' (as yet unspecified how and what they are going to tax) to pay for a very modest tax break for married couples. Which is insane.
It is even more insane that the £6 a year tax on landlines to pay for rural broadband (where there was at least some vague connection between the two).
To be fair, I don't think the Tories are proposing hypothecation actually. They are simply explaining how they intend to fund the married people's tax bung. The bank tax (I agree: bad idea) and the married bung (watered down and pretty much irrelevant) won't be connected in the tax system.
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