If you pay tax then you should not receive benefits.

[jollydiane]

If you pay tax then you should not receive benefits.

Please explain what is the point of taxing me, only to give me money back in the form of child tax benefits? Surely it is better for me to pay less tax in the first place and not receive the benefit. The end result is less money needed to pay for bureaucrats. We then can maintain front line services. Discuss.

Do you mean no benefits of any kind, if you do then i must disagree with you. You may get housing benefit but no tax credit.

In an ideal world then your premise would work but unfortunately the previous Governments incompetence regarding the control of property prices has meant that the Government has to help people and families that are above the tax threshold.

Do you pay as much in tax as you get in TC?

A lot of people don't, therefore the system would not work. It is what they tried to do in the first place and it was an unmitigated disaster. I think it lasted about 18 months before being replaced.

I think the problem is that a lot of low earners pay very little tax and get much more back in tax credits.

But I agree that if the amount paid and the amount received is the same, then the unnecessary admin involved is lunacy.

As tax credit thresholds go down and personal tax allowances go up I think this situation will all but go away.

Daisy - that IS the problem. As a family we get back much more in tax credits than DP pays in tax from his earnings. But without that, we couldn't survive. Even if I went back to work, I'd be under the tax threshold, so tax credits would be paying out MORE to us for childcare (as we don't use childcare with me being a SAHM), yet would be getting no extra from us in taxes. Surely it's more sensible for me to be a SAHP rather than get MORE in TC's if I went out to work as well??

It's the other way round. If you recieve benefits you shouldn't pay income tax/NI.

I agree that it is wasteful to tax then pay it back; although changing that would open up a whole new can of worm in a family where parent 1 earns and pays tax and parent 2 gets child benefit and tax credits.

A huge lot of people would like a flat 20% tax rate and no allowances or benefits, no tax credits, pension tax relief, nothing at all. it is a better simpler more free market system which hopefuly in due course this Government will most towards. It is encouraging that Milliband now elected to leader has been happy this week to ditch his political support to a 50% tax rate.

A friend did some work for Shell and he said they spent more on their tax department than they did on finding oil. Why does no government just do what Xenia said, if a huge lot of people would like it? All these complications just provide nonproductive jobs for civil servants and tax specialists in corporations.

A flat income tax, if it were at the same rate as corporation tax, with no allowances at all, would certainly stop tax avoidance. It might also reduce tax evasion significantly.

Obviously it would not be a 'progressive tax' in the redistributive sense, but a large personal tax allowance (say £15k or £20k) would help.

Lots of tax accountants, lawyers and inland revenue staff might be looking for other jobs though!

Jolly has said this before on other threads.

PArt of her argument is that if I give up £100 in tax, by the time £100 gets back to me in benefits/credits/allowances , so many middlemen administrators have had their hands on it I cannot possibly get back £100 in value.

The administrators aren't exactly contributing to the wealth of the nation, they are just creaming it off the top.

So they have devalued every single £ I receive back in benefibenefits/credits/allowances because they have added NO value to the transaction, in fact they have drained it out just by existing.

Jolly will correct this analysis if necessary I am sure, but it's a hard one to disagree with - cut out the middleman.

So why is it not done? Those middlemen are doing a non-job and should be retrained.

in a word: redistribution

as parents we are subbed by the state, as it doesn't want children growing up in poverty.

when we are childless again, we will no longer be subbed, but will pay tax the same...

the state takes money from everyone, then hands it out according to what it perceives as need. nothing wrong with that on pronciple, though i agree it makes for a clunky system.

It is done. In Bulgaria the flat rate tax is 10%. Hungary is considering a 16% flat rate tax.

We have for many years has smoe kind of assistance for parents however wealthy they are - family tax allowance etc in 1946 the family allowance was started for tax payers around when we launched the NHS - presumably a labour plan. I am not sure what went before that.

I would prefer a low flat rate tax of say 20% for all, no allowances of any kind but large single person allowance of £20k. We woudl have stripped loads of workers from the system in this of course - no benefits officers and the like or many fewer so could afford all that.

but aren't tc paid on household income so it may nto be possible to assume those who pay tax don't need it and vice versa.

I've never had a tax credit in my life as they deem my children not worth supporting because I earn too much I suppose. We never had them at all int he UK until Labour brought them in. We managed perfectly well with them.

I think that the £20K allowance might be too high, too much missed tax that would have been paid by so many people. Are there lots of unemployed Bugarian taxpeople?

But you can't rent a house in the SE on an income of £16K without some form of top-up. It's just not possible, even if you weren't paying any tax on the £16K. The reason people managed without TC's before they were brought in was because there was a) Much more social housing with subsidised (much lower) rents, and b) house prices weren't so high, so even people in private rented wasn't so expensive.

The housing issue is the problem, if a private rented 2-bed mid-terrace house with study (study used as 3rd bed) is now at a private rented cost of £1000pcm in swathes of the SE, that leaves £4kpa to pay EVERYTHING else if there is no tax on the £16K and no TC's. Could you feed, clothe and pay utilities for a family on £4k...which works out as £333 a month, or £76.92 a week? Because I certainly bloody couldn't. Not when you are talking about gas, electric, food, council tax, travel to work, house insurance, and any other costs you may have! My council tax is £1,300 pa.

ll that's interesting because that didn't used to be so. In the early 80s if your income was very very low you did get some housing benefit. I got some for a few months when I was earning £6250pa in London but most people didn't get it. Labour have a political reason why they wanted most people to become in effect supplicants on the state reliant on the state for comfort succour food etc just like communist states are.

So we nnee dto wean people off welfare and I income in that child benefit and tax credits and housing benefit so that most people aren't on them. NOw of course throughout history people have to had tp move for work or where they can afford to live - I did for example. It's very common so we might end up with more of that but we will ultimately have a better society if we remvoe the fact that so many people are state reliant. Also most people presumably on here woudl prefer not to be reliant on the state for money because the state can give with one hand and take away with the other. In some ways I feel much more secure with virtually nothing from the state as teh state can take nothing away.

After rent and council tax, someone with an untaxed income of £16K pa would end up with £51.92 a week for everything else. That's less than the amount of JSA that is paid, and you'd be working a FT week to get that. And be below the poverty level. And what about people on Minimum wage? They would cover their rent, but have NO money left for council tax, food or anything else.

So Xenia - is that level of poverty acceptable for a FT worker in the 21st century?

Yes but Xenia - if all the low-paid workers left the SE - Who would do those jobs? You are saying to move to where the work isd, but I'm talking about people that are working. SOMEONE has to do those low paid jobs, even in the SE. And for a lot of them, it would end up costing the state more if they moved to the opposite end of the country (and where exactly in the North are all these fabled jobs that low-paid SE people are being told to move for? My friends in the NE constantly tell me there are no jobs there either). It would cost more as people in low-paid jobs in the SE may also be caring for elderly relatives. If the worker moves - the state then has to care for those elderly people.

And anyway, Xenia - if all the bin men, shop workers, hospital cleaners, household cleaners, Hospital porters etc move elsewhere - How do the people in the SE feel about none of those jobs being done??

And also - utility and food prices have risen massively in that time. Even since I started running my own home in 1998. Milk in '98 was 21p a pint - now 44p. Bread (a decent loaf) was 47p - the same loaf is now £1.24. Water bills were nowhere near as high, neither were gas or electricity bills. Council tax in 1998 was about half the level it is now.

Sorry what it the point. I'm suggesting people can keep £20k of their income tax free so a couple would keep £40k in the SE - there are full time workers in the SE on £13k minimum wage but not that many and most houses have two incomes coming in and indeed its' culturally normal where I live to live with 4 earners actually because we have different family patterns outside of the white British bits of the UK. SO why are things unaffordable if you strip out benefits and get tax down to 20% and £20k PA single person allowance?

Because not every family CAN have 2 ft workers. And there ARE lots of people on minimum wage in the SE. And it's no longer most houses that have 2 incomes coming in - it's only about 55-60% if I remember rightly (can't remember where the heck I saw that fig, sorry). So 40-45% of houses either have one income due to SAHP or one income due to LP or one income due to disbailities that are too bad to work FT, but not bad enough to get DLA.

Why do you seem to think that a shop assistant in the SE gets paid more than a shop worker in the NE for example? Minimum wage is the same countrywide. So how can there be 'not that many' minimum wage workers in the SE?

OK some cultures in the UK may have 4 earners/ different family patterns, but it's not the norm for a lot of people, they have 1/2 FT workers, and may only have a household income of £12-£24K pa (£12K is minimum wage FT, not £13K, so £12K for one earner, £24K for 2 ft earners).

There are PLENTY of people in the same/similar situation to me in the SE - Take for example, a couple with 3 dc, two of whom have disabilities - one FT worker, other in receipt of carers allowance - which you only get paid for one, not 2, so around £53/wk. So if the FT worker is on min wage, and you add on the 'income' from CA - It certainly wouldn't cover every cost needed to survive above poverty level.

What if you don't have the potential to earn £20K? Not everyone does, you know - shop managers in my SE town are paid £14-£17K pa, and not everyone is capable of being a shop manager!