AIBU to think that Tax Credits and subsequently Universal Credit were the worst thing to happen to the UK?

[BookkeeperBobby]

I can see how it was well intentioned as a mechanism of redistributing money, maybe, in the short term. But 22 years down the line all it means is that employers pay less, productivity drops, UK workers are worth less. Add quantitative easing into the mix which means that anyone with any money buys up assets eg property, while at the same time wages stagnate due to the above, and the country has become a low wage economy with a high cost of living. Which in the face of energy price rises that have to be paid with real money, not just shuffling benefits around, is a disaster.

Did you try to raise a family on a low income pre tax credits op? It was not a good time for people.

It's not a great time for people now

Abs it would be a thousand times worse without TC/UC. You are very naive if you think wages would be significantly higher.

Massive wealth redistribution is urgently required. We have huge millionaires in this country and globally at the same time that we have people choosing between heating and eating.

Taxes and a welfare state are one way of trying to rebalance but I agree, a lot more needs to be done.

I'd like to see more exploration of a universal basic income, tax applied to all assets not just earned income and a much higher tax band for those with significant wealth.

YANBU

I appreciate tax credits helped out many, including me at one stage. However, yes, they helped keep wages low. It's disgusting really that companies get away with not paying a decent wage because the tax payer was topping up their meagre wages. Any full time job should pay enough for someone to be able to survive.

@Specter123 agree that taxes in the UK are archaic. So many are very high yet not linked to income eg council tax, VAT, those are a massive burden on working people. Wages for the majority have hardly budged since 2008 and weren't particularly exciting in the decade previous to that. Because employers know that the state will subsidise the poor wages they pay via tax credits and latterly UC. It's a subsidy for employers and landlords.

Where is your evidence that wages would be higher if we didn’t have those benefits? I remember before the minimum wage and wages were a lot lower then. Also a lot of people don’t get much uc or wtc especially if no children.

Wages were sometimes incredibly low pre the NMW, which came in under the same government as tax credits. Wages can be incredibly low in America, which has a nonexistent/ inadequate benefits system. All it means is that there's no safety net, so workers have to suck it up or starve. Employers have little interest in whether their employees can survive on low wages- if there were no tax credits they wouldn't raise wages out of concern for their employees being unable to pay their bills 🙄. People would just live in poverty.

The only things that drive wages up are legislation and collective action.

I agree. The issue is agreeing what the end goal should be and how we transition. Turning off UC/TC tomorrow would be devastating for a significant group.

The housing situation is a huge driver of all this too - effectively the state paying towards people's rent, often while people work, because renting is just so expensive. The issue with this is that having a place to live is essential. People can't choose to 'vote with their feet'

For me, a closer discrepancy between the very poorest in society and the very richest is the way to go. With a proper tax system, and a robust supportive safety net, we could be a society that actually values our workforce, our disabled and the parents out there.

@BookkeeperBobby - that’s rubbish. Wages for the low paid have risen a lot in the past few years.

Also taxes are archaic compared to where?

Yeah you're right it's all fine, that £30k a year plus £12k housing benefit for working people we're ploughing into the mix doesn't have an effect on wages at all.

QE has caused a massive depreciation of wages.

I don't know anyone who received tax credits that isn't now still paying back massive over payments regardless of notifying them of changes. The system was awful. Yes it helped but short term, people are in debt now through no fault of their own

Also much low skilled and low paid workers are still being replaced because their wages are too high. Eg supermarket workers replaced with electronic tills. If they were even more expensive there would be even less employment.

I believe in a safety net but take your point that employers have used it as an excuse to pay crappy wages.

Also there should be far more council houses building rather than paying private landlords.

@BookkeeperBobby - where are those figures from? What is this 30k per year?

And we have a massive issue with low investment & low productivity. I'm not sure how it can be fixed now though.

I don't think these were the worst things to happen, but they aren't great.

The whole tax and benefits system needs massive simplification but HMRC will never agree as their jobs would be at risk.

tax applied to all assets not just earned income

Agree with this

Sorry, not k, but billion. That is without pension HB benefits.

@BookkeeperBobby sounds like you have taken in some kind of daily mail story. Who is getting 42k in benefits these days?

The issue about workers being more expensive therefore less jobs being available is really interesting.

Isn't this going to happen anyway? As Tech gets started, we will rely more and more on technology rather than humans (the supermarket self check outs being a prime example).

Rather than fight this, shouldn't we embrace it? Look more closely at reducing the standard working week, introducing a universal basic income and encouraging people to develop skills in new areas that will be required for the future?

With pensioner housing benefit added in the total housing benefit bill is £18 billion a year.

Agree. I don’t mind being highly taxed but I want that money going to people not subsidising Tesco’s shareholders.