If you pay tax then you should not receive benefits.

Loudlass - although I voted Tory and will not be affected by the cuts - I am not at all happy about how they have gone about them. They fell straight into the trap Labour set before the election.

BeenBeta - That would be all well and good, but I know of quite a few people that were taken in by Tory lies believed the Conservative manifesto that said that they would not hurt the working poor. Like me for starters. Sometimes turkeys do vote for christmas. .

siasl - yes you are right the boundary of 'dependency' crept up the income scale under Labour. It was cynical and calculated.

Reading MN in the lead up to the election and after it was clear that people on benefits and tax credits and working in the public sector were very fearful of 'Tory cuts'.

I dont blame people being fearful about their personal circumstances but I do blame a Govt that deliberately made people vulnerable and dependent in order to frighten them into voting for them.

It's not that people in the UK don't want to live within their means - it's that their means often cannot cover the basics of life. We have no debt, we couldn't afford to get into debt. If we do not have the money for something, we don't have it! And that includes a new sofa, I bought my sofa for £15 from a charity shop 7 years ago, the springs have gone, the covers are ripped, I am making new covers for it one at a time as and when I can afford the fabric. We don't go on holidays. We pay our bills, feed our dc, do not smoke or drink or have nights out. Yet if we were not in receipt of TC's, we would not be able to pay our rent and feed our children. Some choice!

Xenia - Not every person has the opportunity to live as part of an extended family. I was cared for solely by my dad until he died, my mum never wanted me, I ended up in foster care. Which part of my extended family do you propose I live with? My dead father or my mother who abandoned me?? I highly doubt my dc will be moving out of the family home until they are in their late 20's, early 30's, because there is just nowhere they would be able to afford to live, so the extended family living will propbably happen in my family, bit with my children.

I couldn't live with my DP's parents - his mother hates me, and continually puts me down, even as I am helping her do her shopping as she's unable to do it by herself! She refuses to accept my older 2 dc (not DP's), and is verbally abusive towards me. Could you live like that? Could you subject your dc to that?

And who would take a minimum wage job that doesn't cover basic living expenses (and I do mean basic, food, heat light and shelter) if there was no form of top-up. We would end up back in the days of people living in abject poverty, living with up to seven/eight people in one room. Is that something that should be happening in a developed nation in the 21st Century?

Isn't the most important and overlooked fact the demographics of this country. This is the time when the biggest cohort of the post war baby boomers start collecting their pension, ie, stop spending and start downsizing, and also the year that the 1960s baby boomers turn age 47, the year at which people traditionally stop spending and start saving. Which leaves us with no upcoming generation to pay for all these pensions, and no consumers to keep the economy going.

We need to start exporting to China, India and Brazil, and well done to Cameron for making major trade trips to both so early in the premiership. It is not great, but, it is where the money will have to come from.

Beta, what are your thoughts on the demographics of those two large groups?

Beenbeta. You've hit the nail on the head but you underestimate the extent of dependence on government largesse.

The problem under Labour is how dependent those on above average incomes have become on benefits/tax credits. How can people on anything up to £58k get tax credits? Moreover, the redistribution didn't just hand out money to the "middle class", it also created thousands of public sector administrative jobs (with final salary pensions) for them.

The political motive is clear as this was the voting constituent that would decide general elections. Labour hoped that turkeys don't vote for xmas, and that Labour would be safe in power for a generation.

This policy seems to be working since even marginal cuts are provoking demonstrations and strikes. People in the UK just don't want to live within their means - they like debt- and they won't accept that the standard of living needs to fall to rebalance the economy. Labour are likely to be back in at the next election.

It also makes relativley poorer people 'dependent' on Govt largesse which is what Labour fundamentally wants.

The whole point of taxing you £100 and then giving you back £100 in tax credits is precisely to pay all the administrators in between. It's appalling value for money, but it makes the unemployment figures look great.

It's just a shame it only works when you have a mad housing and financial services bubble to 'fund' it.

The proposed abolition of the ISF will make lots of work for tax lawyers - it has been quite easy to avoid if you have a good fiscaliste; they will no doubt be busy with all the proposed changes!

Not at all. I was not suggesting getting rid of the NHS. Indeed a £10k per person universal benefit is perhaps the purest welfare state you can have and ensures no one is a "claimant" or belittled by claiming anything as everyone from rich to poor stay at home mother to idle slob to 70 hour a week working mother gets their £10k universal credit.

So France they might be getting rid of their up to £200k a year wealth tax I hear which is a socialist redistribution pernicious tax which thankfully we don't have here. Lots of French tax exiles come to the UK.

"Have more emergency care dormitories for people who cannot live off their credit and who reuse to move in with other single people or relatives so that at least they gets beds and food if they fall into dire straits."

Bring back the poorhouse and abolish the welfare state?

1. We can help businesses by abolishing national insurance totally.
2. Increase tax rates as we merge NI and tax.
3. Gradually come down to one rate of tax for all. The basic rate tax used to be 33% (people tinking the past was easy forget 12% mortgage intrest rates, no tax credits, 33% tax - the criticism of Lord Young in today's free for having said people don't know how easy they have it compared to the past is unfair because in many ways he's right)
4. Get rid of all tax reliefs and the like.
5. Cut back state provision of most things
6. Introduce a universal credit to all over 18 regardles of income and abolish all pensions, benefits and the like
7. Have more emergency care dormitories for people who cannot live off their credit and who reuse to move in with other single people or relatives so that at least they gets beds and food if they fall into dire straits
8. No tax on your universal credit whatever level we set that at £10k say but the flat rate new tax say 20% or 30% or whatever we have to set it at on all income over that.

Also tax credits and the rest subsidise businesses IMO. If minimum wage (whatever tax rate you pick) is genuinely not enough to live on then who would take minimum wage jobs without it being possible to top their income up in some way.

The top ups allow businesses to pay low wages and still make huge profits. Simplification of the system would have to take this into account too; I'd quite like it if there was a switch (gradual) to tax credits being something that businesses claim (again?) so that the subsidy goes to small local businesses to allow them to offer competitive wages, or to self employed people for a set number of 'start up' years per business. There is no reason huge companies making millions or billions couldn't offer higher wages, especially if making the system less complicated saved them money anyway.

(Riven has convinced me in previous discussions that this would only work with special measures in place for carers and disablity allowances. So perhaps companies of any size/turnover could get special tax breaks for having policies and practice that make it possible to employ people who face these challenges when it comes to work? Or something like that - it isn't as well thought out as the rest yet!)

It's basically a way of making it worth working for people who would otherwise be better off claiming benefits.

However, it's yet another way of complicating a hugely complicated tax/benefits system. Every gov sees the need to further fiddle with it to eliminate perceived injustices/anomolies in the existing system.

Agree with Xenia and Beenbeta that a simplification is long overdue. Complicated systems cost ridiculous amounts to administer, inevitably result in errors and make evasion/ avoidance easier. When your tax calc is a case of "calculate x% of your gross earnings and attach cheque here" it's far harder to weasel around. Once you get into deductions, credits , allowances etc, it all just gets murkier and murkier. Doing a CGT calc for shares makes you lose the will to live.

I don't see why someone earning a low amount is entitled to tax credits anyway? I just don't understand it.

Surely that just means people in the lowest wage jobs can earn the same as the people who earn a few more £££ than them a year, without the extra effort?

Genuinely confused as to how it works... why should you get a handout if you can't earn enough? If you have a family to support (childcare etc) then whatever

Wrong.

thats very true and it applies mainly to the east europeans who are stealing jobs. a fact that is ignored by their supporters who go on about them paying tax, do the maths, basic wage x tax rate - child benefit and tax credits x housing and school plus nhs costs
yet again we lose out

If they cannot afford the luxury on state benefits of living alone on one income they will just have to live with their extended family which could be good for the elderly . In a way it's the fact that people however poor think they have a God given right for middle class tax payers to subsidise them to live in places and in single person homes that the middle class tax payers cannot afford which is part of the problem. If 4 grandparents and 2 siblings and their families lived together as plentyo f cultures even in the UK have as a structure things are much easier - you have all that free childcare, you cook meals for 10 at a time, you need fewer homes and the elderly have care. It's a win win situation and ultimately may be all the poor can afford as we have run out of inclination or money to pay them under the current gravy train system.

I agree with the OP.

What can be done is what happens in the states - have tax breaks instead together with a higher personal allowance for low earners.

There is no child benefit in USA but spouse, kids and mortgage are offset against taxes making it less of an admin nightmare.

My mom was thinking of moving to NZ. I asked her why and she said she thought it was a safe place, kids riding their bicycles in the street, everyone knowing everyone else....

I told her she didn't want to live in NZ, but in the 1950s

Would I fit in your suitcase perchance?

Jux - I am emigrating to NZ next July where tax rates are lower and they have a better grip on public finances already.