[Closed] Higher rate tax payers to get state handouts

Those who support universality tend to hold that by paying benefits to all it increases 'buy in' by those at the higher income end of the scale, Ie this group are more likely to hold benefits as a good thing even though they are paying in much more than they receive by way of direct benefit.

Another argument in favour is that 'services for the poor become poor services'.

My view is scrap universality and means test all benefits, assuming this is cost effective as against just paying them out.

[i]means test all benefits[/i]

including healthcare and schooling - they're a benefit the state 'gives' it's citizens?

including healthcare and schooling - they're a benefit the state 'gives' it's citizens?

Healthcare could be charged based on lifestyle, rather than income. Education could be per GCSE [i]not[/i] gained.

I am for universality and recoup thru taxation on richer folk - although I would actually prefer a simplified and combined benefits and taxation system - positive and negative income tax

Well, all benefits that you don't wish to be universal. I'm thinking more of those benefits which are received as a payment... Winter fuel allowance, child support, etc.

Education could be per GCSE not gained.

[i]recoup thru taxation on richer folk[/i]

we're back to this 'richer' thing - the trouble is everyone draws a line and puts themselves below it, don't they?

I would actually prefer a simplified and combined benefits and taxation system - positive and negative income tax

Any explanation of how you'd implement that? I just have this horrible feeling that any change to the taxation/benefits system, even one ostensibly "simplifying" would just lead to more bureaucracy.

Education could be per GCSE not gained.

[i]Education could be per GCSE not gained. [/i]

so anyone deemed incapable of getting a certain number of GCSE's would be unable to get a place in any school?

ie have the money follow the student, meaning those who opt for private schooling dont pay twice?

That's a bonkers idea. If you can afford to pay for private, why should the state give you a handout for doing so (and in so doing decrease funding to the less well off)?

Healthcare could be charged based on lifestyle

Great idea; suddenly anyone who rides off-road will have to pay a premium cos they're deliberately increasing the risk to their own health, and posing a bigger burden to the NHS.

Brilliant. Got any more wonderful pearls of wisdom?

That's a bonkers idea. If you can afford to pay for private, why should the state give you a handout for doing so (and in so doing decrease funding to the less well off)?

I guess just get a rebate for going private. Then the state isn't paying anything towards private education, but those who choose private arent paying the full cost of state schooling as well.

Lets start with taking the winter fuel allowance from all these rich pensioners then?

http://www.****/news/article-2075917/Winter-fuel-payment-folly-As-UK-shivers-benefits-expats-warmer-climes-double-years.html

So, 500k top rate paying pensioners get it along with 73k living overseas (often warmer countries).

Apparently too difficult:

[i]Work and Pensions Minister Lord Freud said the payments were a 'simple to administer' means of ensuring old people could turn up their heating 'without worrying about the cost' and ministers had no plans to tax them.[/i]

Don't tax 'em, just don't give it to them.

I have a friend who is a music teacher. She was left a Stradivarius violin by a distant relative. Unique instrument that she claims is the best violin that she has ever played. She wants to know who she should let use it, everyone or only those who are able enough to appreciate its extraordinary tone?

aracer - law of unintentional consequences perhaps? What about an off-the-wall idea? Provide a fiscal incentive for opting out of state provision of scarce resources. At the moment, rich people often pay for public (tax) and private provision (directly or via insurance). They have an incentive to chose the free service and clog it up when they can afford to use the private service. But they will always claim that they have paid for both and therefore entitled to use both. But in a world of unlimited demand and limited supply this does seem very efficient. So give them a tax break on health insurance or even education fees and encourage them to opt out, so freeing up scarce resources for others. Again on the face of it, seems slightly unfair but the consequence could be favourable for the majority?

They have an incentive to chose the free service and clog it up when they can afford to use the private service

They don't 'clog it up' any more than anyone else. Regardless of personal wealth, all people are citizens and members of society and entitled to healthcare on an equal basis. A rich person using the NHS is not 'cogging it up', they are simply using a service they are entitled to, by Law.

Leave things as they are. If those who can afford to want to use private health facilities, then that is their personal choice. Don't see why they should feel entitled to any 'discount'. Should I get a 'discount' on my Council Tax cos I choose to ride a bike rather than use a car, thus creating far less wear and tear on the roads?

Ah, not so simple now, is it, eh?

aracer - Member

I would actually prefer a simplified and combined benefits and taxation system - positive and negative income tax

Any explanation of how you'd implement that? I just have this horrible feeling that any change to the taxation/benefits system, even one ostensibly "simplifying" would just lead to more bureaucracy.

Its simple enough. Everyone has a basic income entitlement which can get added to for other factors like age, illhealth, dependents and so on.

earn below that you get positive income tax to take you up to that level, earn above it you get negative income tax to reduce yo towards that level at a % the money you earn above it. that % can have a higher rate as well.

Is that fair, or a good use of taxpayers' money?

Well they have paid more in the first place... I'm sure a higher rate tax payer will still be a net giver rather than taker even after child tax credits.

I thought the point was to remove the anomaly where two people just under the 40% band will get tax benefits, but two people with one person just over and the other earning less will get nothing. Fixing that seems fair to me.

Does the original poster mean pretty fair stuff like child benefit or other stuff like all the billions we give to rich land owners so they can make their farms nice for shoots?

There is a difference between universal benefits like Schooling, Child benefit and the huge amount of money we give away to rich people > Opera, The Queen, tax breaks...

Elfin -ok 'clog up' the system is the wrong expression albeit with the same outcome. Of course, everyone is entitled to it (universal system) and I accept why you may want to leave things as they are. But it is not a 'discount' issue.

Its basic economics - healthcase is a perfect example of an economic need (for want of a better term) for which there is unlimited demand but limited supply. The fundamental challenge that has always existed is to design a system that allocates resources in an efficient and effective manner. At their extremes, the market and command systems will use price and waiting lists as there principle means of rationing the scarce resources and in practice mixed economies will have a combination of both and other forms of rationing.

So if we accept the basic premise that demand > supply (and indeed is unlimited), we need to think about sensible ways of reducing it and/or increasing supply. So in the hypothetical scenario I presented for discussion purposes, you might consider providing incentives (eg tax allowance) that would encourage people to reduce their demand on unlimited resources. In so doing, you would free up those resources for those who have no access to the financial means to access an alternative supply. Given the numbers, the loss in tax revenues would probably outweigh the benefits in terms of greater access for others.

TJ - that is some weird idea that you have there? But then again I understand how you get there is equality of outcome (in this case money, the very thing that you claim is not that important) is the principle objective.

Dunno about the English position but private schools in Scotland are registered charities and hence do not pay VAT like a "normal" private company would. Given that this decreases their costs, and hence reduces fees, then the taxpayer is already "subsidising" parents who opt to send their kids to these private schools (or [i]charity schools[/i] as I prefer to call them).

eamhurtmore - its an idea proposed many times - its just rolling benefits and tax into one simple system. Just a major simplification of the system adn gives not equality of outcome but equality of opportunity - or nearer. there would be no significant difference to how things are now a[part from it would be simpler and no room for avoidence nor would you get the stupidity of taxing benefits.

Main disadvantage is high marginal rates around the thresholds

As for the healthcare thing - there is so little overlap between private nd public health its irrelevant - where is your private A&E for example?

Once private healthcare providers pay their full costs of course it might help - like paying for the trained staff they poach and so on.