Let’s define wages as the income you get from working, relative to not working.
Then look at table 2.2c (p114) of the latest Tax Benefit Model tables, the DWP’s full description of our tax and benefit system, published today.
This shows that if a single person moves off the dole and into a 16-hour a week job at the minimum wage, he gains just £8.42 a week. That’s a wage of barely 50p an hour.
And if a married couple are unemployed and one takes a part-time minimum wage job, they lose - yes, lose - £6.63 a week. They have negative wages.
No wonder we've so many idling on benefits: look at the wages they get if they try to go to work.
We'll only be able to deal with this by making work pay....and the way to do that is to take the working poor out of the income tax net.
1 comment:
Sorry, but the way to make work pay is not to withraw benefits at rates of 100% or more. Benefit withdrawal is a much bigger loss to the working poor than income tax.
Furthermore, I would rather have higer benefits and no tax threshold than apply a high tax threshold, as non-taxpayers are deatached from the rest of society.
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