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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

AIBU to think that sugggesting Tax Credits should be replaced by higher wages hasn't been thought through

1 reply

minkGrundy · 03/06/2015 16:50

I have seen several threads where posters have suggested that TC should be done away with because they are a subsidy for low wages.

However, a lot of people on TC work PT. Many have no option to work FT as although employment is relatively high, under employment is also very high (plus there may be issues around childcare). So, even if their hourly wage was increased this still might not lift them out of poverty and it isn't that their employer is underpaying.

Also, a lot of TC are used to pay for childcare. If you increase the hourly wage of those using childcare you also increase the hourly wage of those providing childcare, which in turn pushes up the cost, meaning it is no more affordable.

Finally, TC replaced the increased tax allowance that families used to get if they had children. Why should a single childless person get the same tax allowance as someone whose wage has to support 3 people. TC should not be seen as a benefit but as a means tested tax rebate.

Any changes to TC will disproportionately affect women, children and women's wages. Many people I know myself included were only able to continue in their careers post having children because they were able to work PT when there children preschool and use TC to help with childcare. Otherwise they would have had to take carer breaks which would have resulted in them finding a return to the work place extremely difficult. Thus further increasing female unemployment, underemployment and the gender pay gap. Higher hourly wages would not have helped.

OP posts:
DoraGora · 03/06/2015 17:45

There's more free childcare on the way. Alternative forms of childcare arrangements might also be incentivised. Living/higher wages are inflationary, of course. But, then so are supermarkets dumping food and spoiling it, petroleum cartels, insurance cartels and companies who arrange above market price deals for energy and hospitals in return for private investment. There's a decent argument to say that this government and perhaps all in the last two generations have deliberately pursued inflationary policies. The Bank of England, keeping rates low, prevents the chancellor's trousers catching fire.

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