Thread by @TorstenBell

This is 1) predictable 2) a terrible idea

https://twitter.com/MrHarryCole/status/1417213678341038081

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...

...it’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)