The New Maths

Responding to a suggestion by Unison that council tax (in Scotland) be made more proportionate to market values, Numpty at 20 has this to say:

So a single millionaire in a one bedroom flat will pay less than a family of 5, on average income, in a four bedroom house?

a) Council Tax is a tax on consumption of housing, in the same way as duty on booze and fags is a tax on consumption of booze and fags. Would anybody in their right mind advance the argument that a teetotal nonsmoking millionaire pays less booze and fags tax than a normal household?

b) Our millionaire is currently paying over £500,000 income tax/NIC/VAT a year, and maybe £1,000 Council Tax. The family of 5 on average income is probably paying less than £10,000 income tax/NIC/VAT (once you minus off Tax Credits etc) plus (say) £1,500 Council Tax.

Even if you doubled Council Tax, I fail to see how the millionaire can in any way be described as "paying less tax" overall than the family.

"Council workers vote for strike"

Brendan Barber really is a bit of a twat:

TUC general secretary Brendan Barber argued: "Our economic difficulties are caused by reckless lending by bankers and current inflation comes from higher oil, food and commodity prices. "Asking low-paid and average earners in public or private sector jobs to make sacrifices when those who caused the difficulties continue to draw record bonuses breaches any test of fairness."

1. You can make up your own minds who's to blame for oil and food price rises, nobody's really sure. But, assuming that these rises result from global demand, we collectively have to accept that our standard of living will fall; the value of our labour, expressed in barrels of oil or bushels of wheat, has fallen and that is the end of that. Which is not to say that people aren't perfectly entitled to haggle up their own wages, but it is ultimately a zero sum game.

2. Now, I agree that "reckless lending" has contributed to our "economic difficulties", but not on the topic of "record bonuses"; if UK Bank plc has made £1m profit and keeps it as retained earnings, £300,000 corporation tax is due. If the bank pays it out as a bonus, then £476,950 income tax and NI is due, so in terms of filling the public coffers, these City chaps taking outrageous bonuses is A Good Thing, surely? Even better, those tax liabilities are being paid out of thin air - if UK Bank plc had done their accounts properly for the past couple of years, they would have noticed that there were no profits to pay out as bonuses!

3. An increase in public sector wages is paid via the taxes of private sector workers, so although he gives a nod to "average earners in private sector jobs", the majority of your pay rises will be borne by them.

4. And if he really felt for "average earners in private sector jobs", why are the unions threatening that "Everything from local government will stop - we are talking about bins, schools, council offices, environmental health inspectors - all those important services that local communities rely on". Isn't that demanding a disproportionate sacrifice from aforementioned "average earners in private sector jobs"?
- Posh people have big front gardens so they can live without weekly collections for a while, certainly a lot longer than people in flats.
- Posh people send their kids to private school anyway.
- Who gives a shit if council offices are closed? A bit of a bummer for yer welfare claimants, maybe?
- Threatening that "environmental health inspectors" will stop - oooh! I'm really scared now!

Twat.

"Minimum wage will rise to £5.73"

They are not just stupid enough to do this, but pathological liars who don't understand their own rules:

Business Secretary John Hutton said ... "Before it was introduced, some workers could expect to be paid as little as 35 pence an hour...".

I have no idea how many people worked for 35 pence an hour*, but glossing over that, somebody on the NMW and Tax Credits has a marginal tax/withdrawal rate of 70%, so in October 2008, their net hourly salary will rocket from £1.66 to £1.72. If they're claiming Housing/Council Tax Benefit as well, their marginal rate is 95.5%, so their net hourly pay will whizz up from 25 pence to a 26 pence an hour!

Dave Prentis, Unison general secretary [said] "A much more realistic figure would be a minimum wage of £6.75 an hour, which would lift many more families out of poverty and off means-tested benefits."

OK, let's assume Mum's at home with two kids and Dad is slaving away 48 hours a week on the NMW of currently £5.52 = £265 gross, per Table 1.6b the family's net income after housing costs is £259. Increase the NMW to £6.75, and assuming he doesn't lose his job anyway**, their net household income increases by a modest £18 to £275, so the family is hardly lifted out of poverty. At this stage he's paying £71 tax/NI a week but the family is still entitled to Child Tax Credits worth £76 a week, so they are very much still on means-tested benefits.

* But our hard working Dad in the above example is actually working for £1 an hour net; if he were to pack in working, the family's net income after housing costs would only fall to £209 (Table 2.1a). For comparison, in the early 1980s, up in Leeds, I earned £1 an hour working at a printer's and in a café near the market, so 35p must be decades ago.

** Because of course, a £1.23 rise in NMW would cost the employer £1.39 once you include Employer's NI; as against the extra 38 pence an hour our 'hard working Dad' would be getting. So the odds are 4-to-1 that the total net incomes of those people currently on the NMW would fall overall, once you net off the modest wins and those who become unemployed.