AIBU to think wonder why those on minimum wage...

[Joysmum]

...doing a standard 40 hour full time week should be subject to income tax?

It seems madness to me that those on low incomes are subject to direct taxation and yet receive other benefits which they wouldn't need if they weren't taxed!

As if your on minimum wage tax is teeny, but other benefits are obviously considerably more. Its pretty simple and I nevee understand how people dontbget this.

Benefit system is seperate. Why would you want to mix the two. Peoples circs change throughout the year... Tax credits can accomadation that

Don't get why you think the two should be linked?

Isn't that what the present government is working towards? The PAYE tax thresholds have been rising every year with the goal of raising them (I was under the impression) to around 10k so that low earners didn't pay 'much' tax.

It's still a con considering the cost of living and other benefit cuts they have/will make.

YABU to assume that everyone on a low income receives benefits - especially the under 25s.

The income tax threshold is going up to £10,000 (a key Lib Dem policy) so this is happening. I never understood the way that a lot of people would be taxed and get given their money back in tax credits.

yes toboldly is right only people on low wage with children ar disability get benefits. That's why there should be a living wage to make it fairer for all who have to work on minimum wage

Ah - thought it didn't sound like a typical Tory policy.

It's not a terrible policy tbf, although it doesn't have quite the same impact when it's surrounded by tory bile.

Redlondonbus

They should be considered together because why should a low income household pay tax and yet have to wait ages before a benefits claim has been processed and be in even more hardship till then?

Then there's obviously the costs of administrating the taxing on one side and the assessment and paying out of any benefits required on the other. Surely it would save administration costs simply to raise the tax threshold in the first place.

Redlondonbus

They should be considered together because why should a low income household pay tax and yet have to wait ages before a benefits claim has been processed and be in even more hardship till then?

Then there's obviously the costs of administrating the taxing on one side and the assessment and paying out of any benefits required on the other. Surely it would save administration costs simply to raise the tax threshold in the first place.

toboldlygo I hope you'll take this thread in the spirit in which it was meant, that those struggling financially in society shouldn't have to be subject to the risk of delays and balls ups of both incorrect tax codes and a benefits system that's unable to process as quickly as those most in need deserve.

Oops, sorry I posted before I was done

Annie, not everyone on minimum wage gets benefits, me for one. My wage is all there is, and I assure you the tax does not feel 'tiny' .

It cant be considered together. An employer doesn't know household income. A very well off household can have one partner on a low income (part time, get out of the house type job) while the other earns six figures.

So should the personal allowance be raised for everyone, or just those on minimum wage?

If everyone, what should they tax to raise the lost revenue?

If just those on minimum wage, how would they police that? And what would they do about those people on a level marginally above mw, that would end up with less net pay than those on a lower hourly rate?

I agree that income tax should be scrapped for those who earn minimum wage. But I also think child tax credits should be completely scrapped as well, although sadly working tax credits are a necessity because wages are so low compared to the cost of living, and that would be so even without paying income tax on NMW.

Childcare could be heavily subsidised through childcare providers instead so those that need CTCs for childcare wouldn't become unable to afford to work, and eventually work would pay and people would have to consider how many children they can afford based on their wages rather than their tax credit entitlement.

All that would happen is the same as now, where your tax code is based on your earnings so you'd get either the equivalent of minimum wage tax free and any other income considered desperately as it is now. I've just seen the news story that this is proposed by the lib dems and would be the third increase if this kind so plainly it's already happened but not enough to meet minimum wage levels as I personally think is the first step, with minimum wage being set at a living wage the idea but too complicate to implement given disparities in living costs between regions.

Many min wage employees are young people or second earners in a household whose income is otherwise average.

The need for top-ups etc occurs at a household level (based on number of kids, living costs etc) and should happen via the benefit system.

Tax isn't an evil. It's something we all do to contribute to the society that we all benefit from. YABU to want to disconnect lower earners from these social bonds.

I also think it's a plain risky strategy when we have so much ugly rhetoric about "hard working taxpayers". Take those on the min wage out of tax and they lose this status and it becomes much easier to take away the tax credits etc, that they will still need if they are the sole earner.

There's more than one tax in this country. I may not pay income tax but I pay numerous others.

They don't carry the same weight in political discourse though.

first £9440 of income is untaxed, while this is definitely a low wage this policy is in place. The threshold goes up each year.

I would like to see the personal allowance set so that precisely 50% of adults are exempted from tax, and the rest are all taxed at exactly the same marginal rate.

This would create an exactly even split between those with an interest in the tax rate increasing and those with an interest in it decreasing, which should keep things politically balanced. It also means there is no minority ("the rich") who are considered fair game for whatever the majority feel like taking from them.

From memory, I think my marginal rate of tax is something like 38% for income in the basic rate band and 46% for income in the higher rate band, so we are already much closer to having a single rate of tax than most people realise. (Hint: I take into account NI, including employer's NI.)

Much more radically, I would like to see the benefits system fundamentally changed so that benefits are on a per-adult basis regardless of household composition. Obviously the per-adult amount would be adjusted for child-dependents. It would also have to include a standard allowance for cost of housing, if the amount you are to receive is to be divorced from considerations of who you live with. This would remove the current incentive for single-adult households to exist. If you get exactly the same benefits whether you live alone or share overheads with one or more other adults, then many people would choose to share and average cost-of-living would decrease.

I'm a MW full time employee, but DH earns a lot so no benefits of any kind in our household. It wouldn't be fair if I didn't pay tax, so it's fair to tax everyone and then provide the additional benefits.

paying taxes gives us all more investment in political outcomes. And a perception of more rights to comment on the outcomes (how taxes are spent). I'm all for a 10% tax band, but no tax band for those on FT NMW is a bad idea.

Someone else can comment but I am pretty sure that average standard of living goes up for everybody the more incomes taxes a govt collects.

I found out the other day that a friends son (17) is being paid £3.70, or thereabouts for working in a local pub.
Fucking shocking.
Minimum wage should be the same for everyone no matter how old or young they are.
Food and bills and fares and rent aren't cheaper because you're only 17.

God knows how little he'd take home if he paid tax.