[wdmmg-discuss] child benefits for higher tax-payers
julian at goatchurch.org.uk
Mon Oct 4 10:40:52 BST 2010
The news from this morning:
It's a shame we don't have a graphic showing the distribution of
payouts to the different household earning brackets lined up against
the total income tax take on each of these households.
I have got into frequent arguments with my grandfather who always
thinks it's unfair for high rate earners to be able to claim this
benefit, which they then spend on shopping.
He should perfectly well know that the benefit effectively clawed back
through their higher tax rates. If you are willing to consider your
net balance with the government (tax subtract benefits) then there is
no apparent injustice in it. And means testing this benefit causes a
considerable bureaucratic complexity, as well as adding awkward
So I am pleased by the implementation, which is consistent with my view:
Osborne: "People will be expected to declare on their tax returns
whether they fall within the 40% and 50% tax brackets and the money
will then be clawed back through the tax system... However, Mr Osborne
urged top-rate taxpayers to stop claiming child benefit altogether,
saying this would be the "most sensible" thing to do."
Of course it can be interpreted as a tax rise in people with children,
rather than a benefit cut. The two are numerically the same. But
politically they are quite different.
We now have a great example where we can test whether politicians
choose either to educate us about the equivalence, or deliberately
misinform the public about their equivalence to a political advantage.
I am, however, deeply disappointed with the following soundbite the
Chancellor is running with:
"Mr Osborne said he expected the public to accept that it was not fair
to tax someone earning £18,000 a year to pay child benefit to someone
Is there a chart showing total taxes and total cash benefits claimed
(as well as population percentile) for each income range? I mean I
think the truth is the reverse. The £50k earners are paying for the
child benefits for £18k earners as well as the £50k earners.
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