Reasons not to vote Labour #43 - tax credits
Posted by Christie Malry on April 30, 2010 at 11:00 am
Tax credits are one of Gordon Brown's biggest failings.
He failed to take account of what the policy would mean for real people. In effect, people on low incomes had to tell HMRC every time their income changed. If they didn't, or if HMRC failed to take account of the information properly, then the wrong amount of tax credits were paid. And then HMRC started writing to people demanding the money back, invariably asking for the wrong amount back. Often to the tune of many thousands of pounds.
It was an absolute shambles. It should never have happened.
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I have been recieving tax credits for some time now, and it is a real lifeline. People have no excuse to say 'i am better off on the dole' anymore. We have had mistakes made, but everything was rectified in good time and with little hassle. To be fair, when we got the letter saying we did not need to pay council tax last year, it seemed way too good to be true. Under the Tory party many less families will be able to get this help, and also the Tories wish to destroy the child care industry and make working harder for many by reducing benefits to help with child care. Sorry, but to me tax credits were the only good thing to come out of the Labour term, I will viote for them again.
I have no argument with helping the low-paid. But tax credits are a daft
way to go about it.
Introducing 'de minimis' amounts, below which you are not required to
communicate a change in income to HMRC, was a good (if expensive) idea.
But it doesn't address the fundamental problem that there were cheaper,
better ways to help the low-paid. such as raising the personal allowance
with, say, a corresponding increase to higher rate tax to compensate.
The way in which HMRC miscalculated the amounts payable and then went back
to families to demand many thousands of pounds back was cruel and verges on
the criminal.
From a policy point of view, Labour will be delighted that they've got your
vote as a result of tax credits. As a net payer of tax, I am much less
delighted that taxpayers' money is being used, in effect, to bribe people
to vote for the ruling party. It's tantamount to fraud.
As an aside, there's something faintly amusing about the middle class
couple in the recent Labour PEB whining about the prospect of having \"their
money\" taken away. Let's target help at those who really need it, not the
middle classes. And let's do it sensibly, not in a complicated,
bureaucratic way.
I never saw tax credits as a bribe. I think it is a tad insulting terming any benefit as a bribe, I feel a bit insulted by your comment. However I have to agree a simpler system is most often a better system. Tax Credit went some way to simplifying the benefits system and also getting people off of benefits, maybe more could be done. I cannot see the Conservatives doing anywhere near as much in terms of helping low paid people as Labour.
A lower tax system would help low paid people. The reason Labour tax the low paid is because they need the money. It's disgusting that they tax people who need that money to be paying rent, buying food or paying utilities. But they have no choice because they spend so much of the country's wealth.
Cut that share down to 30% or so of GDP and they could afford to give every taxpayer a massive tax cut. And they could bottom slice it, which would help the lowest paid.