The issue of income distribution has caused rivers of ink in the blogosphere over the past two weeks for Todd Henderson, a professor at the University of Chicago who feels poor despite winning more than $ 250,000 year. As you climb the tax burden will intensify the debate on both sides of the Atlantic.
Here, the week has been dominated by the withdrawal of Child Benefit to families where there is a tribute to the taxpayer (old) 40% maximum rate, which applies to all those who earn more than 44,000 pounds annually. The Child Benefit is a payment of 20 pounds a week to get all the families for their first child until the latter reached 16 (or 18 if still studying) and 13 pounds per week for each subsequent child. Total, 1,700 pounds per year, than someone who is taxed at the rate of 40% it is the equivalent of 2,900 pounds in gross salary.
Some observations random:
(1) Amparo Polo says it is "a child receiving aid all families in the country, and now only receive low incomes, reflecting the mantra that this is an attack on Middle England. In fact only 10% of taxpayers earning more than 44,000 pounds and the number of affected families is limited.
(2) The government has estimated that the change will affect 1.2 million families, although some think that this number could grow in 2013, when the measure is applied. It is complicated to explain, but basically it seems that the installment of 40% surely be reduced something in the next two years.
(3) For me at least it seemed entirely predictable, although during the campaign that conservatives were explicitly refused to do so. And in the background does not make much sense to be giving taxpayers families the highest decile distribution of income a public subsidy of this type.
(4) The system is really ridiculous. As Alex Massie question (via Andrew Sullivan ) "If You Were Starting from scratch Would you really take the view That What the Country Needs to do is collect taxes and Then use STI Those taxes to send child-support checks to Every in the family Country, Regardless of need? "The question is rhetorical. Obviously the answer is "clearly not, unless You are Gordon Brown," because that's what Brown did with its complex web of tax credits.
(5) Much has been said about the impact on a hypothetical family with a single taxpayer who earns only a little over 44,000 pounds a year, with two children, and addressing the cost of living in London. The line of defense that conservatives have been prepared to say that the median family income of those affected by the change is from 72,000 pounds a year (that's what Phillip Hammond says Jeremy Paxman here.) But obviously that does not negate the fact that yes, there will be some low income families with a little more that 44,000 pounds a year to whom change is going to be a major sacrifice. The Random Family would be one of them, but thank God the Rio Tinto offer more than adequately compensates for the loss of Benefit.
Sorry no graphic notation - do not think the party compensated links.
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