Friday, 27 January 2012

Economics for Dummies - Lesson 1

OMG, I have longed to blog again. Many times I have almost started again. I have missed it. So much. But time has been against me. And still is. But daily helpings of the madness of modern British society and all its loopy nonsense, with no one pointing out the cold, hard facts of reality, have compelled me to return. Here goes:

The economics of the Left's 'anti-benefit reform' agenda

First a few facts, delivered to us on this day children, by the ONS - they're impartial, right?

Fact 1 - National mean salary = £26k

Fact 2 - Salary needed to be in the top 25% of taxpayers = £32k

Thus, lowering benefits - apparently outrageously - to a maximum of £26k (which is the equivalent of earning £34k) means that even after this change you can still earn way more than the national average and in fact be in the top 25% of earners. Unbelievable. Unless you are a bishop that is. I have blogged many times before that the Left's well intentioned but economically illiterate over-active philanthropy with other people's money (ie ours) has simply priced the low paid out of work. What incentive does someone who cannot ever earn £34k have to work? This fundamental will never change until we decrease benefits to more sensible levels. So I have a suggestion: why not create a tax ratchet, whereby starting at the new £26k benefit maximum, in each fiscal year from 2012 we decrease that maximum by £500 whilst raising the income tax nil band by £500. This would begin to decrease benefits to levels that will incentivise work but reduce tax/increase income for the low paid whilst having an almost completely negligible financial effect on those horrible greedy rich people politicians want to kick all the time. Simples.

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