If anyone hasn't already noticed, a debate is raging over how to cut back government expenditure. Of course cutting out the, now infamous, "peace-pods" is painless (or at least I would hope so!). The scale of cut backs required, however, is inevitably going to mean cutting other items which some people will think are important.
Recently the debate has focused on the coalition government's plan to cut child benefit payments to Higher Rate Tax payers. For the most part I have ignored the arguments against the cut because in large part they focus on the inequalities it creates for people on the margins of where HRT kicks in. The inequality which is quoted already exists in the tax system, in as much a couple earning just under the threshold each, do not pay HRT, whereas a couple with one person just above the threshold will.
The removal of a benefit paid to people above the threshold exacerbates this inequality, which is claimed to be 'unfair'. However, this inequality is caused by the income tax system, and whilst the change does exacerbate the problem, the debate is not about reforming income tax. In fact by removing the benefit another inequality is avoided, being the inequality of low-income earners subsidising the raising of children by high-income earners, as is currently the case.
Therefore, ignoring this argument should leave us with an acceptable policy (in that most people would agree that high income earners should not need state support to raise their children). However, I have noticed another argument quoted which signifies another point of view I find very worrying. That is the feeling of entitlement for state support.
A government front bencher no less, was quoted in The Times as saying, "I sacrifice so much and now George 'millionaire' Osborne takes away the only thing the State gives our family back". That a MP, and a government member at that, can think this way astounds me. Ignoring the long list of government services every member of society receives in return for their taxes, the idea that we are all entitled to money back from the State cannot be correct. As an MP this individual will already earn in excess of £65k p.a. and yet they feel that although they are in the top 15% of income earners in the country, they are somehow entitled to a State benefit.
Starting with a blank sheet of paper, on a mission to design the 'fairest' tax and benefit system, I would have thought a good place to start would be to establish the definition of 'poor'. As poverty is relative, we could say that the lowest earning 25% of society can, for our purposes, be classed as 'poor'. Developing that point on we could reasonably say that anyone earning more than the lowest 25% of society should not need, or be entitled to, any State benefits. Whilst I may have plucked the 25% figure out of the air, and in reality this might be subject to immense debate, I would have thought that everyone earning in the top 15% of society could easily be eliminated from receiving benefits, without much argument.
The Governments proposals at least tackle this problem. That they exacerbate another inequality, which already exists for those at the margins, should not cause such strong feelings. Legislation is changed in increments and any improvement should be welcomed. If it raises other issues in the process they should be tabled for debate at a later date. Otherwise progress cannot be made.
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