Westminster Council Fat Tax

[RosieH]

And JSA is taxable, so although if you don't work for a full year, you wouldn't take home enough to pay tax, if you then get a job and so meet the threshold, your JSA will count towards taxable income.

[DJKillaQueen]

Reddulwich is indeed spot on, and it's an ideology coming from top down. When Cameron talks about the worker leaving for work while the neighbour's curtains are still drawn' he is doing exactly the same thing. Except this statement is completely irresponsible of course, as the neighbour could be a shift worker, disabled, or still have the curtains drawn for a whole host of other valid reasons. Many people in receipt of benefits also do voluntary work. They are still unemployed but he doesn't mention them. Constant use of the media to spread messages of the drain on hard working people of the underserving poor are only going to have one impact. They absolutely know what they are doing and should be ashamed of themselves.

[Otta]

DJKillaQueen Wrote:

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> They also pay Council tax (Council tax benefit

> does not pay the entire amount).

That depends on the circumstances.

Rosie's point about JSA is interesting. You can't blame people for not wanting to take little jobs if it will basically tip them over the tax threshold and they're worse off. They should make JSA Tax Exempt so that any bit of money you earn is actually worth getting out of bed for.

[Marmora Man]

Lots of hype, exaggeration and misinformation around.

I'd agree there is a fair bit of dog whistle politics going on from the right of the political spectrum but there's roughly the same amount going on from the left demonising businessmen, bankers and anyone running their own business as tax dodging fat cats. Neither position helps the debate.

As Hugenot has pointed out only 40% of the population are net contributors to the cost of government. This is not sustainable. However, it is a fact that the total government costs are more than the country can afford, reforming government spending must be a priority.

[Marmora Man]

Otta Wrote:

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> DJKillaQueen Wrote:

> --------------------------------------------------

> -----

> > They also pay Council tax (Council tax benefit

> > does not pay the entire amount).

>

>

> That depends on the circumstances.

>

> Rosie's point about JSA is interesting. You can't

> blame people for not wanting to take little jobs

> if it will basically tip them over the tax

> threshold and they're worse off. They should make

> JSA Tax Exempt so that any bit of money you earn

> is actually worth getting out of bed for.

This is one of the clear objectives of Iain Duncan Smith's reforms to create a Universal benefit that does not "dis-incentivise" individuals from joining the workplace.

The argument also misses a critical point that once in employment, however badly paid, an individual can improve their position through overtime, training and advancement in the company or by burnishing their CV and seeking a new job eslewhere.

Short term thinking along the lines of "this job pays peanuts - it's not worth my while" ignores the longer term benefits. After all - at age 18 it's possible to get a job earning say ?20Kpa rather than go to university / college and gain a professional qualification as a doctor, engineer, architect etc. However, the short term low paid period is far outweighed by the longer term advantage.

[DJKillaQueen]

I agree with all that MM but it also has to be mentioned that most of the jobs created over the past decade have been part time jobs. The reality is that we just don't have enough full time jobs out there, and with that jobs that pay enough.

I totally agree that the economy can't sustain the current situation. But there is too much talk of those who depend on help from the state and not enough about the lack of jobs and industry etc. The way out of this mess is going to be growth in available employment, not creating an underclass of people at the edges of homelessness and/or starvation.

I often like to give Sheffield as an axample (because it's home to Nick Clegg's constituency). In Sheffield, there is only one job on offer at any one time for every eight people on JSA (so we are not even counting those on other benefits). There is no way that any amount of bashing the unemployed is going to miraculously change that. And that's a scenario repeated all over the country outside of London and the South East. The reality is that we have too large a population with too few jobs to support it. THAT is where the government should be directing it's efforts to solve any of this.

[Otta]

DJKQ beat me to the punch. When you consider that in many cases we are talking about totally unskilled work, there are only so many jobs to go round.

I do agree though MM, much better to start in a rubbish job (if you can get one) and work your way up, than to just not bother.

[Ridgley]

I agree Otta I am sure most of us started, our jobs that way at some point in life but the problem is the pay is very low and that means you will have to depend on benefits to help with the short fall so it becomes a vicious circle . Maybe if employers pay a living wage rather than a minimum wage it might get more people out of the poverty trap.

[reddulwich]

Another way would be to make JSA and other benefits more flexible. So its not that people 'can't be bothered' to get a job, but they are disincentivised.

So if people are on JSA, care for family members etc, but can say work one day a week, they can still claim benefits or part of those, without them going over the threshold. It can also be a way of easing them back into the jobs market.

[DJKillaQueen]

I too think benefits need to be more flexible for those returning to work or those offered one or two days work here and there (which at present they have to turn down or sign off). What has to be watched with that though is that employers don't then see that as an excuse to lower wages (a rise in the minimum wage could address that but again presents problems).

I do think that many of the problems with the benefits system are mirrored by problems in the employment market. Businesses too are struggling to survive in the current climate.

No-one wants to see a return to a pre-welfare society, but economically we are heading back to that. Technology has rendered formerly labour intensive employment areas redundant (especially unskilled work). This is something seen across all the developed nations. There needs to be a radical rethink but sadly those at the top, making the decisions, are the winners in this system. They are not touched by any of it.

[StraferJack]

"only 40% of the population are net contributors to the cost of government."

what are the historical ratios of this calculation I wonder?

when income is more evenly distributed that 40% would go way up, wouldn't it?

[????]

I must admit an economy where we don't seem to pay enough workers enough so that they need to have their incomes topped up by benefits strikes me as a bit mad and inefficient. We'll pay you x quid an hour and then top it up via tax credits just must be inefficeient? I have changed my views on the minimum wage too, paying people a decent wage in the first place so they are less likely to need state handouts and am less convinced than I used to be that this'll damage our international competitiveness. Also, given that over the years i have moved to a position where I have considered voting Tory, David C and others unplasant rhetoric about those on benefits is making that option less palatble and whilst normally I ignore all the stuff about 'posh boys' etc, in this case you do really wonder.....moving to the right is suicide for the torise in my opinion and i thought Osboune and Cameron raelised that, got spooked by UKIP methinks

Although I do agee with MM, the continual bashing of 'the rich', 'businessmen (never woman, note) bankers et al by many on the left is just as prejudiced and harmful.

[DJKillaQueen]

I agree regarding the bashing of the rich too. It all stems from trying to find simple models of blame (from both sides) for what is a really complex issue. But that is also why 'one size fits all' solutions won't work either.

[reddulwich]

Both MM & ???? have mentioned the bashing of the rich. I think it is more nuinanced than that, I think if you work hard and pay your taxes. You expect you are doing that within a fair and balanced system. For example if you pay your taxes from source under the the PAYE system.

If however you pick up a newspaper and see schemes and scams (many of which are legal) being exploited by other people, perhaps wealthier people, quite rightly you are going to be angry and upset.

I don't think 'the left' attack all businessmen, bankers etc. Small business is the bedrock of the economy and they are suffering and are equslly unhappy at the unlevel playing field.

I do think though, if the single mum who works behind the counter in my bank branch isn't able to ask for her pay to go into a limited company and can't ask for her bonus to come in the following financial year, then someone working in the Invest bank arm of the same bank, shouldn't be able to either. Its a simple concept called fairness and if we are all in this together, then we should all make a contribution.

[DJKillaQueen]

There's no better example of the unlevel playing feild between businesses within the same sector than the recent expose of Starbucks tax affairs, compared to say Costa (their biggest competitor). And yes, that does make people justifiably left feeling there's no fairness when it comes to the wealthy and large corporations.

[LondonMix]

Jobs, pay and the economy are very complex and it?s really easy to think forcing employers to pay employees more will solve many problems. However, it is impossible for any business to pay people more than the value they contribute to a business. A universal increase in labor costs (without any change in productivity) simply results in inflation. If the increase only affects a certain segment of the population, in a worst case scenario, it can actually reduce employment among that group.

If you have to pay someone more than they contribute in value, it will either force your business to close or it will force you to substitute employees with technology (when possible).

Some have mentioned that the economy needs to create more jobs, but creating more low / unskilled jobs won?t increase the standard of living. The only real way to do that is to train / retrain the unemployed so that they have the skills the economy needs so that they have the ability to create value that justifies paying them what we consider by today?s standards a decent quality of life.

[DJKillaQueen]

But here's the issue LM. Labour tried that.....pushing kids through colleges they didn't want to be at because they couldn't do the academic stuff. There will always be a sizeable section of a society that don't respond to formal education, or can't achieve the higher required skills base needed for the modern world. In the past they would be employed digging our railways, or building our ships, and they could start as apprentices and learn on the job to become semi-manual-skilled workers and often paid well for it. THOSE jobs and industries don't exist anymore......and those people are truly locked out of the employment market, unless we change something.

[LondonMix]

But what could that possibly be DJ. Even if we could create those kinds of unskilled jobs, those people's standard of living can't possibly keep up with everyone elses without government subsidies. I don't know if there really is a segment of the population that literally cannot genetically form part of the modern economy.

[DJKillaQueen]

I don't pretend to have any answers. I can give examples though of several young people, who have interests in gardening or mechanics and were absolutely fine when shown how to do something or trained on the job, but failed the one day a week they had to spend at college. The result being they failed their NVQs and haven't been able to get a start in employment.

Even when looking at long term unemployed (and discounting illness), we see patterns of manual workers made redundant (usually after factories closed) and young people who have never got started. Whilst improving literacy and numeracy should always be an aim of any society, we have to also accept that there are people who are never going to be able to pen push, write reports, and pass exams.....all an impact of a move away from manufacturing and agriculture to service industries. A balanced economy needs a balanced range of unskilled amd skilled jobs, both manual and hi-tech. There has almost certainly begun the development of an unemployable underclass since the demise of manufaturing and industry.

And sadly I can only see things getting worse. Technology will continue to advance and the need for labour drop. I'm not sure there even is an answer.

[steveo]

Eugenics

[LondonMix]

DJ, technology has continually made certain types of jobs redundant since the industrial revolution but overall employment is still relatively higher than at many points in the past. I don't believe that things are quite so bleak but this is just another period of transition which unfortunately has dislocations. I do agree that certain people have skills but learn in a different way and perhaps need to be assessed in a different way than can be captured by traditional testing methods. That the current system doesn't know how to capture the skills these people have and teach them they way they learn best is not the same thing as dooming them to a life of unskilled labour. What we should be thinking about perhaps is creating more apprenticeships, developing new teaching and assessment styles etc that are relevant to the modern economy's needs.

[Huguenot]

I love the idea that someone can 'make jobs'.

[Burbage]

LondonMix Wrote:

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> What we should be thinking about perhaps is creating

> more apprenticeships, developing new teaching and

> assessment styles etc that are relevant to the

> modern economy's needs.

What needs?

Perhaps it's worth considering the lessons of this cheery tale, which demonstrates, to a nicety, exactly what'll happen to the 'knowledge economy', should it ever get off the ground.

Napoleon was sort-of right. But instead of a nation of shopkeepers, we're a nation of middlemen, consultants, project managers and advisors, making a living by marking-up the work of others. What the internet is doing for retailers, so it will surely do for middlement, consultants, project managers and advisors - as the story illustrates. Some things, by necessity, will remain. But pawnbroking and manicures aren't likely to get us very far.

The beauty of globalization is that, like all democracy-delivering revolutions, they empower the poor and leave the feudal barons gibbering in bedsits. Britain, and the other developed nations, are in the place of those feudal barons and although we're still clinging on to past glories as if they're some sort of birthright, singing Rule Britannia and parading our timeshare Navy, we're also beginning to gibber. Every time our politicians promise the world, with all the benevolence of desperation, the unsustainable living standards that we can no longer deliver for ourselves, a little bit of us must die.

Sure, compared with a bankrupt US and a broken Eurozone, we've managed to borrow and print enough money to temporarily achieve stagnation. But you can't honestly think that's anything more than a fraud. Our regulatory nonchalance might make our financial sector, and our land, pleasant targets for a multinational plutocracy, but only until they get a better offer.

The education fraud is similar. Every few years, a government will decide we should teach youngsters the skills they'll need for the future and, after months of consultation and millions of futile pounds, valiantly rebrand woodwork. But the future they're looking at is always the future of ten years ago. Take the current spate of calls to teach kids how to program computers. Now put that in the context of the outsourcing tale. Our programmers are competing directly with counterparts in countries where a dollar an hour is more than a living wage. You may as well teach them needlework or typing.

[Huguenot]

I understand the anxiety Burbage, but I think that maybe your worries have caused you to cherry pick the changes which inform your dismal outlook.

You're right that Britain will not retain its lead on the rest of the world, but your vision sees Britain being dragged down which is illogical - it's actually the rest of the world catching up.

Whilst you're right that programmers in Shenyang can do the job of workers in California, you've overlooked the fact that side by side with their success is increasing wage demands and expectations for a developed world lifestyle.

So the rise of the East heralds an equivalent rise in demand, and their wage advantage is terminated.

I think your scorn of the knowledge economy is misplaced - we already only spend around 5% of our income on food and on average 25% on accommodation, so around 70% is spent on entertainment and generally making our lives easier.

Far from being worthless, the knowledge economy of intangible services (like entertainment) is what being human is all about.

Ideas of what the world looks like in 50 years are many and varied - but everyone agrees that manufacturing will be increasingly mechanized and automated: right now the entire world supply of Worcestershire Sauce is made by only 40 people.

Within that context, any nation betting its future prosperity on manufacturing looks stupid - and that includes China. The only person getting rich from manufacturing is the robot operator and the programmer: both products of the knowledge economy.

People get rich by solving other people's problems - and on that basis British strategy to focus on the knowledge economy is not only rational, it's inspired.

Although it's discomfiting, we need to get out of a 1950s mindset that only sees an economy in simplistic 'hardware' terms.

[LondonMix]

Not just solving each others problems, but entertaining each other and finding novel ways to amuse ourselves in our leisure time.

The global economy is very complex but at its essence, its all of us as individuals doing things for each other. We are all getting better / more productive at this. Those who don't know how to do anything or aren't very skilled at doing anything will have a poorer quality of life as they will have less to exchange with others.