So how much are YOU prepared to pay ? : Sat Jun 08, 2013 5:28 pm  

http://www.telegraph.co.uk/news/politics/10106437/Revealed-how-much-you-pay-towards-benefit-bill.html The calculations by The Telegraph (above) are an attempt to replicate what HMRC are going to do next year, that is prepare personal statements to each taxpayer to show where their direct income taxation was spent in the previous 12 months. Its not definitive, its the newspaper's best guess based on what HMRC have told them but it'll do as a rough guide to what the income tax and NIS deductions on your payslip are used for - unfortunately accompanied by the typical desire for every newspaper editor to put their own slant on things and in the process make massive assumptions and mis-report what could be a useful item. For instance the headline uses the extrapolated figure of £200,000 over a lifetime of work that an individual on £50k would have contributed to "the welfare bill" and keeps emphasising this figure throughout in what you can only presume is some sort of shock tactic to support the current trend of demonising anyone who has the audacity to use any form of welfare, "they" being the "shirkers" in the current governments way of thinking. What the newspaper doesn't go to great lengths to point out is that the Welfare item also includes pensions and so their example "middle class earner" who contributes £200k over 43 years will, unless they manage to die before 65 years of age (at the moment), start to draw on that welfare contribution. By extrapolating the annual contribution into a career contribution they not only exaggerate the figure but seem to forget the point that a middle class £50k earner is highly unlikely to have earned the equivalent of £50k all of their life, will possibly have taken career breaks, or worked internships or apprenticeships, may have had years out during child raising, etc, etc, etc - there won't be too many who started work at 16 years of age on £50k or its equivalent figure in 1970 - the lifetime contributions are sensationalist rubbish and hopefully HMRC won't be going down this path, if they do then we know that they are being massively politically controlled. Another point that The Telegraph seem to miss, or avoid, is the relatively small amount that the average earner pays towards a pension, a state pension without get-out clauses, one that does not rely on an insurance company to bid on your end-of-career pension pot in a sort of auction of generosity where you have to read the small print to make sure that your annuity is exactly what it seems at first reading - a state pension pays out until the day you die regardless of what you have paid in, and frankly at those annual contributions you would not receive anything like the figure in the state pension if you are on an average wage making those levels of contribution, nor would your "Welfare and Benefits" contribution pay for unlimited private health insurance either. EU contributions come bottom of the list if you're on National Minimum Wage you could probably pay your annual EU contribution out of the change in your pocket right now, your next round in the pub will certainly be more than your annual EU contribution, your next pint in some pubs will be more in fact - will this take the focus away from the EU at the next election, is it really such a huge topic that at least one political party make it their total focus for power ? If it makes interesting reading then you'll be getting your own personal one from next year, just in time for the next general election, will it make a difference to how you view the political parties manifesto's ?

http://www.telegraph.co.uk/news/politics/10106437/Revealed-how-much-you-pay-towards-benefit-bill.html The calculations by The Telegraph (above) are an attempt to replicate what HMRC are going to do next year, that is prepare personal statements to each taxpayer to show where their direct income taxation was spent in the previous 12 months. Its not definitive, its the newspaper's best guess based on what HMRC have told them but it'll do as a rough guide to what the income tax and NIS deductions on your payslip are used for - unfortunately accompanied by the typical desire for every newspaper editor to put their own slant on things and in the process make massive assumptions and mis-report what could be a useful item. For instance the headline uses the extrapolated figure of £200,000 over a lifetime of work that an individual on £50k would have contributed to "the welfare bill" and keeps emphasising this figure throughout in what you can only presume is some sort of shock tactic to support the current trend of demonising anyone who has the audacity to use any form of welfare, "they" being the "shirkers" in the current governments way of thinking. What the newspaper doesn't go to great lengths to point out is that the Welfare item also includes pensions and so their example "middle class earner" who contributes £200k over 43 years will, unless they manage to die before 65 years of age (at the moment), start to draw on that welfare contribution. By extrapolating the annual contribution into a career contribution they not only exaggerate the figure but seem to forget the point that a middle class £50k earner is highly unlikely to have earned the equivalent of £50k all of their life, will possibly have taken career breaks, or worked internships or apprenticeships, may have had years out during child raising, etc, etc, etc - there won't be too many who started work at 16 years of age on £50k or its equivalent figure in 1970 - the lifetime contributions are sensationalist rubbish and hopefully HMRC won't be going down this path, if they do then we know that they are being massively politically controlled. Another point that The Telegraph seem to miss, or avoid, is the relatively small amount that the average earner pays towards a pension, a state pension without get-out clauses, one that does not rely on an insurance company to bid on your end-of-career pension pot in a sort of auction of generosity where you have to read the small print to make sure that your annuity is exactly what it seems at first reading - a state pension pays out until the day you die regardless of what you have paid in, and frankly at those annual contributions you would not receive anything like the figure in the state pension if you are on an average wage making those levels of contribution, nor would your "Welfare and Benefits" contribution pay for unlimited private health insurance either. EU contributions come bottom of the list if you're on National Minimum Wage you could probably pay your annual EU contribution out of the change in your pocket right now, your next round in the pub will certainly be more than your annual EU contribution, your next pint in some pubs will be more in fact - will this take the focus away from the EU at the next election, is it really such a huge topic that at least one political party make it their total focus for power ? If it makes interesting reading then you'll be getting your own personal one from next year, just in time for the next general election, will it make a difference to how you view the political parties manifesto's ?

Re: So how much are YOU prepared to pay ? : Sat Jun 08, 2013 7:55 pm  

When this idea was first mooted, I thought it was simplified, sensationalised bollards. I've not seen anything since to suggest differently.

Presumably the tax paid will simply be multiplied by the estimated percentage of UK public expenditure in each area to give the figures. How those are then categorised is open to political exploitation. Do you separate out benefits and pensions, or do you lump them together to exaggerate the figure, for example?

Presumably the breakdown for the NHS won't show what percentage of your "contribution" is ending up in the hands of private sector shareholders as dividends?

Re: So how much are YOU prepared to pay ? : Sat Jun 08, 2013 8:39 pm  

Andy Gilder wrote:

Presumably the tax paid will simply be multiplied by the estimated percentage of UK public expenditure in each area to give the figures. How those are then categorised is open to political exploitation. Do you separate out benefits and pensions, or do you lump them together to exaggerate the figure, for example?

Well they haven't done it officially yet but this is what is already happening when the press try to replicate it, The Telegraph quoting the "Welfare" figure as a lifetime contribution and then suggesting that the "average" person will not get that money back in retirement is proof of the ultimate target market for this particular line of propaganda - its another way of blaming five years of recession and slow/no growth on a perceived underclass of "shirkers".

What they don't explain in quite so much details is that their lifetime contribution number is pure invention, that it includes pensions and is not just for benefit payments, and that the "average" salary that they used in inventing that figure was £50k, yep, thats pretty much an average salary around these parts - thats a 155 hour week for someone on minimum wage.

Re: So how much are YOU prepared to pay ? : Sat Jun 08, 2013 9:04 pm  

I'm happy to pay whatever I'm asked to so long as it goes to the front-line of need. I am not happy to pay for political ego trips like weapons sysyems and fancy trains.

Re: So how much are YOU prepared to pay ? : Sun Jun 09, 2013 9:18 pm  

I'd pay as much as was asked if I knew that everyone was paying their fair whack to ensure that health, housing and education were available to all and that those in need were being fairly treated in my estimation.
I'd pay more than now to achieve that.

Tax is a civilising fund.

[DaveO]

Re: So how much are YOU prepared to pay ? : Mon Jun 10, 2013 9:48 am  

Perhaps there is an opportunity here to "reverse engineer" this to show how little some things do actually cost us?

I already did this kind of thing some time ago when looking into the cost to the taxpayer of funding University tuition. People paid a very small amount of their tax toward that so the low paid actually paid next to nothing per year (and the government spin implied they were virtually paying all the students fees).

So in a similar way perhaps the Labour party could, when being taken to task on spending use a similar mechanism to point out just how little some things actually cost.

With more realistic figures they could also point out how little some of the cuts will actually save and so use that to point out they are politically rather than economically motivated.

Unfortunately I doubt they will because at the moment they seem to let the Tories set the agenda and so it's all about who can cut the most rather than using figures like these to argue against them.

One thing that is not clear to me on glancing the article. Tax income for the government doesn't just come from income tax. So it would be interesting to know how things like reducing corporation tax down to 21% affects how much more personal income tax is required to fund the welfare state.

Re: So how much are YOU prepared to pay ? : Mon Jun 10, 2013 11:53 am  

I wonder what percentage of the UK's weekly Jobseekers Allowance costs would have been covered by the interest and penalties that Dave Hartnett unilaterally decided to waive for Goldman Sachs?

Re: So how much are YOU prepared to pay ? : Mon Jun 10, 2013 12:18 pm  

Andy Gilder wrote:

I wonder what percentage of the UK's weekly Jobseekers Allowance costs would have been covered by the interest and penalties that Dave Hartnett unilaterally decided to waive for Goldman Sachs?

... or Vodafone, whose tax bill he arbitrarily slashed, even after the court judgement that they should pay up the full £6bn.

Vodafone's auditors were Deloitte.
Dave Hartnett now works for Deloitte.
Pure coincidence, obviously.

Re: So how much are YOU prepared to pay ? : Mon Jun 10, 2013 12:32 pm  

Clearly Ed Balls isn't prepared to pay much. He's talking about capping state pensions. Clearly, 2 Eds are scared stiff of getting into power and are intent on ensuring Labour are wiped out in 2015.

Re: So how much are YOU prepared to pay ? : Mon Jun 10, 2013 12:48 pm  

Dally wrote:

Clearly Ed Balls isn't prepared to pay much. He's talking about capping state pensions...

Is he?
I heard him say they'd cap the total welfare bill within which pensions would be included.
He might cap pensions, I don't know, he hasn't said... has he?