I’m writing to add balance to the debate on cutting tax credits. We must cut tax credits. We must increase household earnings. We must target state support and end universal tax rebates in favour of means testing. It is a sick society where something like 20 per cent of households are eligible for a tax credit.
Why has this form of subsidy grown from less than two billion to more than 30 billion per year over the past 20 years?
Is our society poorer? (GDP has grown in the past 26 years every year except 1990 and 2008/9). Surely we must get our economy off hand-backs from the government and find a balance where the overwhelming majority can provide for their families without state subsidy.
I do think that we must also ensure that the working are not penalised, thus cuts must be balanced with general tax policy and minimum wage levels.
This might include a progressive minimum wage structure (part-time paid more than full time based on tax code for example) or adjustments in NI payments either by employers to encourage higher wage rates, or to individuals to enable increased take-home pay?
Whatever – let us get away from taxing people and then handing back the tax. Let’s stop paying universal child allowances but rather increase it to those children living at the bottom on the income scale.