This is 1) predictable 2) a terrible idea
Raising taxes to help deliver a half decent social care system is👍 - something governments have needed to do but ducked for two decades. This crisis only reinforced the urgent need to deal with this national disgrace
It's predictable this would be a serious option because politicians think raising National Insurance sounds less like a tax rise, and the public does in some ways associate it with the NHS.
But raising National Insurance is a turkey of a way to raise the £10bn odd needed. All it's got going for it is that it would actually bring in the cash required (a 1% rise in all NI rates would raise around £12bn), but against that...’s a tax disproportionately loaded onto younger people and lower-paid workers (compared to a fairer rise in income tax) who have borne the brunt of this recession
It's a rubbish idea 1: Younger people bear more than their share because it is only paid by the working age population (ie up to age 67)
It's a rubbish idea 2: Lower earners pay more because you only have to earn £9,560 to start paying NICs vs £12,570 for income tax.
It's a rubbish idea 3: It's less progressive than income tax because you only pay NICs on earnings - so those with lots of wealth who rely on dividends or savings for their income don't contribute
It's a rubbish idea 4: IF the plan is to increase all NICs (ie including employer contributions) this also deepens our tax systems mad incentive for people to be self-employed (where no employer NI is due) rather than employees
Did I mention this is a rubbish way to raise taxes?
Times front page also has the story
Should be clear what is/isn’t wrong with national insurance rises (given lots of comments this morning). It’s wrong to say a NI rise is “regressive” - the distributional problem is 1) that it’s less progressive than income tax 2) generationally ludicrously unfair
The idea of relying further on higher council tax bills is also ludicrous (the people needing social care don’t live in the places that can raise the most from council tax)

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More from @TorstenBell

12 Jul
Such an odd crisis: what comes alongside the biggest GDP fall in 300 years? A wealth boom. Here's a breakdown of whose wealth has been booming... 🧵
The anatomy of the Covid wealth boom:
Savings up £200bn +
Debt down £10bn +
House prices up 8%
= total UK wealth up by £900 billion to £16.5 trillion.
What's going on? Two unrelated effects. First the direct impact has seen the usual wealth falls for those losing their jobs (hugely unusually) outweighed by Covid restrictions = big spending falls for higher income households = lots of savings
Read 9 tweets
8 Jul
This whole "we need to cut Universal Credit to boost jobs" thing is really winding me up. There are six million people on Universal Credit, in a lot of different circumstances....
2.6m are already working or preparing to work - how does them having £20/week less to live on create any jobs?
1.2m aren't working and it's government policy that they shouldn't (e.g they've got a child under 1). Has the government changed their mind and their policy to say they should work? No. So it's just making them poorer.
Read 5 tweets
7 Jul
Here’s the PM’s defence of cutting £20/week from 6m households in October. The argument = “we need to cut it because we care about jobs.” This is nonsense - here’s why… 🧵
1. loads of the people having their benefits cut ARE WORKING. The share of Universal Credit claimants working has actually gone UP in the crisis (35% before to 37% now). We’re talking 2m people…
2. The PM’s implicitly saying we must cut benefits so people have an incentive to work. But that incentive is VERY strong: if we cut the £20 benefits would be at their lowest level EVER vs earnings Image
Read 6 tweets
7 Jul
This is political and economic madness…
Cutting the incomes of 6 million households by £1,000 a year from October is a huge hit to family incomes just as the recovery is getting going. The poorest households in the country will see their incomes fall by 5% overnight
Even if you somehow think (despite widespread food insecurity amongst poorer families) that the current level of benefits is too high, here's three reasons why the context of this Autumn means a huge cut isn't a good idea
Read 8 tweets
11 May
Hard not to conclude that's a fairly thin Queen's Speech.
Reasonable people might say that's understandable given the Government has had this pandemic thing to deal with. But it's quite a contrast with Biden and government's own build back rhetoric.
I'm broadly a fan of the main substance that is in there economy wise. On skills adult learning guarantee is desirable when we've still got 40% of the population without A-level equivalent qualifications (in contrast am sceptical that loan access will make much difference)
Read 8 tweets
10 May
What marks out this levelling up agenda piece from @racheljanetwolf is:
- it has an actual agenda
- it's an argument for the Tories becoming French (specifically the 20th Century French right) ie focusing on liveability of places not their productivity…
I basically support a lot of what's in here. Liveability should be prioritised. The real trick is to combine it with sorting out our second cities productivity disasters too
That's what gives you the chance of ecosystem change for regional economies. The politics is towns vs cities but the economics is the opposite.
Read 7 tweets

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