Wednesday 19 December 2012

Authoritarians missing their own point, as per usual

Spotted by Bob E in The Telegraph:

The Bill for Welfare Cash Card is designed to stop welfare claimants buying what Shelbrooke deems “NEDD” goods – Non-Essential, Desirable and often Damaging – which include cigarettes, alcohol and gambling. It would not affect those who cannot work and receive disability-related payments or those on the state pension, but it would apply to all other in-work or out-of-work benefits.

1. Yes, booze and fags are very expensive in this country, precisely because the authoritarians have burdened them with such high taxes, three-quarters (or whatever) of the cost is tax.

2. The self-same authoritarians then say "We don't like welfare claimants spending so much money on expensive booze and fags. If they have enough money to spend on things like that, then they are getting too much money."

3. The fact is, it sorts itself out. If a welfare claimant spends £30 a week on booze and fags, of which £22 is tax, then the authoritarians say that his welfare payments should be cut by £30 a week. Actually, that welfare claimant has just voluntarily reduced his own net welfare payments by £22 a week, because that money goes straight back to the government, he's only getting £8's worth of booze and fags.

4. As a thought experiment, what if booze and fags weren't taxed, and the welfare claimant was only spending £8 a week on them? Would the authoritarians then be so niggardly and judgemental as to want to cut his welfare payments by £8? Probably yes, but hey.

16 comments:

Anonymous said...

" . . in how they spend their money . ."

The problem is that it's not "their" money: it's money taken from taxpayers by force of law and given to them. A very good discussion of the issues here is on Tim Worstall's blog.

Mark Wadsworth said...

A, ta for backup.

U1, the amount of cash money which welfare claimants get, deservedly or otherwise, whether by force or otherwise, pales into insignificance compared to the value/money transferred by force from 'society in general' to landowners-bankers :-)

A K Haart said...

Good point. I bet they took the whole idea much further in their informal discussions.

Anonymous said...

I don't deny that booze and fags are taxed at a ludicrously high level. Nor do I deny that - in the UK where LVT is not generally applied - there are tax advantages in owning land. However, the point I made (which, on re-reading the original post, seems more germane to that post than your comment on my comment) is that there is a real problem in that it is possible in the UK to fashion a lifestyle whereby state benefits will support a non-disabled individual in idleness from cradle to grave: and the wherewithall to pay for these benefits is paid by
the taxpayer.

IMHO even if the UK had a thorough-going LVT regime but with the present benefits regime alongside it, this problem would still exist on the basis that LVT is solely a method of raising taxes not deciding how those taxes should be applied.

Mark Wadsworth said...

AKH, ta.

U, yes, replacing the entire Welfare State with a flat rate universal Citizen's Incomes with no means testing etc seems like a much better way of doing things, even if that is funded with a flat rate income tax.

But the logic of LVT says that welfare has to be flat rate and universal, non-means tested etc. Income tax has no inherent logic whatsoever in this regard.

Bayard said...

"The problem is that it's not "their" money: it's money taken from taxpayers by force of law and given to them"

In what way does this not apply to any employee of the state? Would you be happier if the unemployed were made to do something time-consuming, but utterly useless in return for their dole? Even if they were to have to do that, at least they are not given yet more money to spend on doing that something completely useless, as are many of the much more highly paid employees of the state. Is it better for the country as a whole to pay someone £100 a week to do nothing or to pay someone £1000 a week to do nothing of any benefit to anyone?

"it is possible in the UK to fashion a lifestyle whereby state benefits will support a non-disabled individual in idleness from cradle to grave:"

Indeed, but what is the alternative? Starving or otherwise compelling the idle into employment, but who is going to employ them? As an employer, I would never employ someone forced to work. Not only can they easily do nothing productive for their money, they can also be less than productive, either by sabotage, or by preventing other people working effectively. It's no good sacking them either, if the only alternative is to take on another pressed idler. It might make you feel better if such people were forced into some sort of employment, but it wouldn't do the economy any good. Since we don't actually have full employment and therefore some people will be compelled to be idle, whether they like it or not, surely it is better to have the determinedly idle idle and not those who are willing to work, but can't find any.

Mark Wadsworth said...

B, yup, agreed. And while the Mail-rading classes might grumble about "the bloated welfare state" (two-third of which is old age pensions), another possible outcome of scrapping it is basically a complete breakdown in 'social cohesion' i.e. riots and so on.

Kj said...

I suspect that there is a slight possibility that the paternalistic features of the welfare system creates what the welfare-haters perceive to be the problem. You have this, and also the gasping about ending weekly payments, not paying HB directly to the claimants etc. If they are trying to create children, they are probably succeding among a certain part of the claimants. Plenty of welfare systems in other countries is very much cash-based, monthly payments etc., without the claimants lives falling apart from their supposed incompetence and perceived lack of self-control.

Kj said...

Also, excellent point about direct payback from excise taxes M. Sky TV is almost always brought up as another typical welfare claimant friolous expenditure, perhaps excise taxes on cable subscriptions would be in order? :)

Robin Smith said...

True

But when will we start asking the deeper question without getting angry and calling me an abolitionist:

"Why are people taking drugs in such harmful quantity anyway"

Could it be because that is all the fun they have left when in poverty? Go and do a soup run and look at how well stocked they are.

Lola said...

I am not sure I follow the comments logic, exactly.

From observation it does seem that the current benefits system encourages indolence. Personally I have the view that both people on each side of the desk in the benefits office are 'on benefits'. Neither are making any net contribution to the national treasury nor are they engaged in production of any form.

But it is generally accepted - even by the most absolute of libertarians that we should not abandon the ill and the unfortunate. But, why must it be the state that does that? Or rather why central government?

If LVT were introduced and it was collected locally and a sum paid out to cnetral government for its work, why would t not be logical to retain 'benefits' funds to managed locally? I am proposing this on the basis that benefit claimants are better managed by people who know them.

In regards to their being 'no jobs for those on benefits' I think that you can argue that the present benefits system destroys productive jobs in private business.

It's all a conundrum.

banned said...

Whatever happened to Luncheon Vouchers"? 'for bona fide meals only'?

Anonymous said...

Bayard

If you’re content to have money taken from you by compulsion and a part of it given to someone who is capable of working for a living – but will never be prepared to - then that’s fine for you but why should I be happy about it? Indeed, just because it might be difficult to design a system to minimise free-loading is no reason to give up the attempt.

Also please don’t manufacture strawmen or try to impute arguments to me which I never made. I am not suggesting that “make-work” is an alternative to unemployment. However, I can assure you that there are real jobs out there (including in the public sector) which – in this part of North London anyway – are being filled. Unfortunately, they are not being filled by ostensibly British residents.

Anecdotal, of course, but it appears to me that many of the road-cleaners and dustmen working in Muswell Hill (and employed by the London Borough of Haringey) have difficulty with English and, insofar as I can gather, are nationals of countries in East and South Europe. As to shop assistants (eg at our local 99p store, Sainsbury, Costa, Waitrose etc): when talking to each other most speak in one of the languages of the sub-continent or of the EU and some find it difficult to respond to enquiries made in English. Let me make myself clear: I do not condemn these people (nor their employers). On the contrary, I admire them: they are hard-working and provide polite and efficient service for not very high wages.

Nevertheless, it is noticeable how relatively few of such jobs – and this goes for other jobs locally – seem to be filled by those recently (or not so recently) graduated from the UK education system. There appears to be little appetite by those brought up in the UK to take lowly employment whatever their ancestry. Why should this be?

Part of the reason is that benefits are organised in such a way that it can be very expensive at the margins to be employed more than 18(?) hours a week and I can see the logic of turning down employment to avoid such costs. However, it is undeniable that the system also makes it possible to have a life-long career as a benefit claimant or, until becoming able to graduate to such a position, remain part of a family in such circumstances. Benefits careerism might be an almost inevitable consequence of the wider welfare system but it’s no reason to lie down and think of England while our wallets are being raped.

Bayard said...

"If you’re content to have money taken from you by compulsion and a part of it given to someone who is capable of working for a living – but will never be prepared to - then that’s fine for you but why should I be happy about it?"

U, once the money has been taken from me "by compulsion" I have absolutely no control as to what it is spent on, so why should I care? No, I am not happy to have the government take money from me by compulsion, but since, as far as I am concerned, there is no connection between taxation and spending, there is no point about worrying about what they spend it on, the think to worry about, if you are into worrying about such things, is how much is taken in the first place. I am almost 99% certain that if spending on the idle unemployed was reduced to zero next year, the tax take would not alter one iota, nor would the total spend; the money would simply be spent somewhere else, with probably as little to show for it. The idle unemployed are not costing you personally a penny because you would not be a penny richer if they weren't there. It's the government who are raping out wallets and they will continue to do so whilst we lie down and let them.

You advance no figures to support your case that for every unemployed british idler, there is a employed immigrant, it's all "stands to reason" logic. In any case, you are still advocating that the unemployed idle be starved back to work and you haven't answered my question about who is to employ them. Given the choice between
a grumpy, workshy, starved-back-to-work idler and a "hard-working, polite and efficient" immigrant, I'd know who I'd employ and I think most employers would do the same. So, unless you kick out the immigrants, the net result of your attempts to compel the idle into work will be minimal. If you do kick out the immigrants, you have replaced a large number of the hardworking and efficient with the idle and inefficient, to the vast detriment of the economy. I think that's really too high a price to pay, simply to give the government a few more million quid to waste and make you and people who think like you happy.

Anonymous said...

Bayard

“You advance no figures to support your case that for every unemployed british idler, there is a employed immigrant” That wasn’t what I wrote but what I did describe were my impressions and I was careful to note – although you ignored it – that the evidence was anecdotal.

“Given the choice between a grumpy, workshy, starved-back-to-work idler and a "hard-working, polite and efficient" immigrant, I'd know who I'd employ” Of course and thank God for them, but my point (and I’ll write this again but as simply as possible) was to ask why the alternative British workers might be grumpy and workshy and I concluded that part of the reason was because of the way the benefits system is organised.

I notice you agree that part of the government rape of our wallets is spent on misdirected benefits although you’re happy to see millions – perhaps billions - wasted. As it happens, it also appals me that, for instance, the London Borough of Haringey wastes perhaps £100,000 on its news/council propaganda magazine. If it stopped publication tomorrow my council tax wouldn’t change. Even so, it’s an egregious waste of money. However, following your reasoning, I should grin and bear it because, having paid my council tax, it’s now out of my hands and thus the council has my implied consent to do whatever it wants with that money.

The reason I commented on this thread was to express my belief that benefits careerism should be ended and that, at least, benefit careerists should not enjoy a better material existence than those who work for a living. This is not “starving people back to work”. It’s the most anybody should expect from a benefits system.

Bayard said...

"why the alternative British workers might be grumpy and workshy and I concluded that part of the reason was because of the way the benefits system is organised."

Whereas I think that the British have always been the same and it is the grumpy and workshy who have ended up on the dole, where they will always be unless compelled to work and it really doesn't matter how they are compelled to, they will always be virually unemployable.

"although you’re happy to see millions – perhaps billions - wasted"

No, I'm not happy, but I accept it as something I can do nothing about.

"However, following your reasoning, I should grin and bear it because, having paid my council tax, it’s now out of my hands and thus the council has my implied consent to do whatever it wants with that money."

Well quite apart from the fact that most local authority money comes from central government, yes, unless you think that you, personally, can do something about it, in which case good for you, make that change, then there is no benefit to you in caring one way or the other. And yes, sadly, they do have our implied consent: that is one of the evils of rule what we call "democracy" (which is actually an elective, time-limited form of dictatorship).

Yes, I think that our benefits system is badly set up, but the problem is not that "benefit careerists" are getting too much money, because such people will always be few, the problem is the "benefit trap" because that affects far more. Mark has written many posts on this subject, how the newly-employed are subject to income tax above 90% by way of benefit withdrawals. Introduce a non means tested citizen's benefit available to all who can be bothered to go to the post office in person and collect it, scrap or considerably the minimum wage and the benefit trap would disappear and I believe that we would finf, paradoxically, because no-one has to work, more people would actually end up working.