Saturday, 14 January 2012

Child Benefit

So, I notice that Child Benefit has become an issue again, with the Government indicating that it may backpedal slightly on it's commitment to cutting the benefit for higher rate taxpayers.

Of course, under the Government's current proposals, one family where both parents earn £40,000 a year would still be entitled to Child Benefit, whereas another family where only one parent earns £45,000 would not be. Their policy is ridiculous - it's full of holes and hasn't been thought out properly. If you're going to withdraw it, it effectively has to be means-tested.

Of course, therein lies another problem - means-testing is complicated and expensive, which will reduce the amount of money saved by the cut. So, predictably, Labour propose to leave it as it is, which is equally ridiculous.

Here's my proposal, which makes perfect sense.

Abolish it entirely. And tax credits too, while you're at it.

According to the 2011 Budget, tax credits cost the Exchequer around £26billion a year. Child Benefit costs about £12billion a year, according to the IFS. Scrap them both, and use the proceeds to abolish Council Tax. You'll still have £12billion left to play with. Use the rest to increase the Income Tax personal allowance, which (after merging National Insurance with Income Tax) will not only make the poorest people better off by lifting them out of the tax system, but will also make it cheaper for companies to employ people.

Osborne. Sort the Budget out. It's not rocket science. It's fucking basic arithmetic and common sense.
Stop paying people to have children, and start rewarding them for working by letting them keep their own bloody money, instead of taxing the fuck out of them with one hand and handing them benefits with the other.