Those poor high tax rate payers

16 December 2006

You might imagine that it is the wealthy who are paying tax up to 90% of earnings.

Unfortunately not. A recent report in The Times (8 Dec) quotes Mike Warburton of accountants Grant Thornton who says that there are 1.68 million people, on the breadline, who suffer a 60p loss for every £1 earnt when they take employment, because of tax, National Insurance and tax credit clawback. For some people there is a 90p loss - they are left with 10p. You would imagine that those people struggling to get off the bottom rung of the poverty ladder – would be the first people whom Gordon Brown the UK’s Chancellor of the Exchequer would have helped. But since 1998 the number of these poor high tax payers has grown from 0.76 million. What ever is wrong?

If someone as focused and skilled as our Chancellor has not been able in 8 years, to clear up this problem of high marginal tax rates for the poorest, I suggest that another solution is tried – the Citizens Royalty (aka: Citizen’s Income). This would be paid to everyone girl, boy, woman, man, regardless of employment status. All citizens would qualify. Look at www.citizensincome.org and find their paper Issue 1, 2006 which gives figures as to how it would work within current budgets for tax and NI. The payment for Children would be £50 per week; Adult £90 and Pensioner £110 per week. There is an international movement for this reform. (See bien@basicincome.org). The scheme would be simple to run and the poor would start to earn on the same level playing field as everyone else. Who said a Citizen's Income would be a disincentive to take paid work? It must be better than the current nonsense.

Also read The Free Lunch – Fairness with Freedom (www.the-free-lunch-com).