Home Economics It's not right to make the poorest pay tax

It’s not right to make the poorest pay tax



In the Telegraph is this claim:

We have created a weird, through-the-looking-glass tax system where a tiny number of the highest earners have paid most of the bills and a bare majority paid a little bit, but for close on half the population the Government, the welfare state and the health service have all been essentially “free”.

That was a serious mistake. By constantly taking people out of the tax net, successive chancellors removed any link between what the government does and what you have to pay for it. Why not vote for more and more state spending, higher public sector salaries, more generous pensions, lavish infrastructure projects, and endless bail-outs if you won’t be expected to meet any of the bills?

This is a moral vileness. This part is not so much wrong as incomplete:

In effect, Sunak is bringing to an end one of the key policies of the Cameron-Osborne era. Raising the basic rate threshold well ahead of the rate of inflation was imposed on the Coalition government by the Lib Dems – remember them? – as the most efficient way of reducing the tax paid by the poorest.

It was the CPS that convinced Osborne, it was me that convinced the Lib Dems. I even know the name of the individual I convinced who get it made into policy with Clegg.

The actual point being the following.

We have a minimum wage. Perhaps we shouldn’t, I don;t think so, but we do. The only justification for a minimum wage is that there is some minimum amount that an hour of labour is worth. Without that justification there is no justification.

So, here’s what we’ve, societally even if wrongly, decided an hour of labour is worth. £8.91 for labour sourced from someone 23 years or older.

So, why does that now get clipped to pay for diversity advisers? We’ve just said that it’s immoral to have it clipped to pay for profits, or HR power skirts, or internal to the workplace diversity advisers. So, it’s immoral to have it clipped for external to the workplace diversity advisers, isn’t it?

That means that the personal allowance should be £17,374.50 this year given that minimum wage and a 37.5 hour work week. Anything less than that is an immoral clipping of the minimum value of labour.

That was actually the argument made way back when. Which is why the current personal allowance is £12,500, because that’s what the full year, full time, minimum wage was back in 2008/09 when the argument was being made and accepted.

You can be against the very idea of a minimum wage, as I am. You can indeed argue that poor folks should pay for the upper middle classes in the state apparatus. But the argument that there should be a minimum wage and also that it should be taxed fails. Because the only justification for a minimum wage is the same reason it should not be taxed – that’s the minimum labour is morally worth.



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in British English
expunct (ɪkˈspʌŋkt)
VERB (transitive)
1. to delete or erase; blot out; obliterate
2. to wipe out or destroy

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