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June 24, 2005

Polly Potters.

Our Polly is in fine form this morning. Fine, fine form.

Even so, it takes the breath away to find that out of the 6 million families getting tax credits, almost 2 million have been overpaid by an average of £1,000 each. For some it may be trifling amount, but for others a hefty sum is seized back and it has to be repaid before the end of the financial year.


Y’what? You mean that the pursuit of social justice, the entire Nu Labour project, the orgasmic fulfillment of Polly’s stated desires, is that redistributed tax money is going to those for whom a thousand quid is a trifling amount? This is supposed to make us support this derangement in what manner precisely?

So is there something wrong with the entire tax credit system that is endemic, cultural and insurmountable? No, all this is a matter of dreadful bungling in administration at HM Revenue and Customs colliding with a catastrophic computer crash.

That is the problem that is endemic, cultural and insurmountable. No one, absolutely no one, knows how to run a system as complex as the tax credit system. There isn’t a single organisation in the world, public or private, that knows how to deal with the changing circumstances of 60 million people, the transient rises and falls in income, and respond to them in a timely and efficient manner. It isn’t, at this point, whether the basic idea itself is a good or bad idea, it is that the technology (both in computer terms, hardware and software, and managerial terms) simply does not exist and is not anywhere close to being invented soon.

However wonderful it would be to have a system that could calculate the loss of that three hour’s overtime on Tuesday and make sure the appropriate addition to the support were there on Friday (or the reverse, reducing the support of extra income arrives) it simply is not within human power to do this at present.

So yes, these sorts of problems are endemic and cannot be resolved. Thus the entire idea fails, goes down in flames. Sorry Poll, but that’s the truth of it.

These are, after all, the poorest working people; their overpayments are trivial compared with the £50bn in taxes officially estimated to be defrauded from the state by the undeserving rich.

Bollocks! The official estimate is that that is the sum "lost" to tax evasion and tax avoidance. Tax evasion is indeed illegal and can indeed be described as defrauding the state. However, little of that is done by the rich, deserving or not. Most evasion is done further down the economic system, working for cash, knock the VAT off that for you Squire. Avoidance  is legal and is more likely to be done by the rich. Trusts, tax allowances, investment subsidies....all entirely legal. Don’t confuse the two or we might want to come round and have a look at your tax return and check out, say, your deductions for travel expenses. You are, by your logic m’dear, defrauding the state by deducting your legal and legitimate expenses.

However, there is one serious long-term critique of tax credits. They are a massive hidden subsidy to low pay, allowing employers to pay sub-survivable wages in this most unequal of EU countries.

Oh My Lord, where does she get her ideas? This is not the most unequal of EU societies. And this idea of a hidden subsidy? What in hell is she talking about? Does she really think that if the tax credits went then wages would rise? Has she any idea at all of the most basic economics of the firm? How wages are decided? Well, obviously not.

There is no known or imagined economic model that can abolish child poverty while the rich soar ever further away at the top, leaving growing numbers of people trapped in low pay at the bottom.

What is this stupidty? We have many economic models that will abolish child poverty, yes, even while the rich soar ever further away at the top. It is only because, in a piece of quite insane looniness, that poverty is defined in relative not absolute terms, that this conundrum exists. Define poverty as it ought to be, in absolute terms, and the seeming impossibility goes away. As long as everyone is getting richer in absolute terms then we shouldn’t care about the distribution of incomes....and as a number of economic models put forward, there is the idea that allowing (if not actively encouraging) income inequality is a good way to actually get that economic growth.

Ach, the hell with it and her. I truly do not understand why she is such a nationalist. She obssesses over, whimpers about, minor monetary imbalances in incomes inside the UK and completely ignores the grander problem. We have people in the UK who are housed, fed, clothed, educated and their health cared for and 2 billion people on a dollar a day in other countries. Mithering about on the subject of whether our homegrown chavs and scrotes should  get a little more per week in their baccy allowance when we should be hammering away at the problem of how to increase the wealth of the world is morally obtuse. Currently, even if we redistributed everything in an egalitarian manner across the 6 billion there would still be absolute poverty. So why don’t we solve that first before wittering about social justice at home?

June 24, 2005 in Politics | Permalink

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» EU Media: Does Anyone Understand Polly Toynbee? from EU Rota
Recently Tim Worstall introduced me to the "writings" of Guardian columnist Polly Toynbee. There are plenty of things I do not understand when it comes to economics, nuclear proliferation, grammar, and the such. [Read More]

Tracked on Jun 25, 2005 12:37:11 AM

Comments

My own experience with Child (or perhaps Children's) Tax Credit was that their website accepted that I had a daughter to justify my claim, but the office to which I sent my form said that I had no daughter. After 20 hours of effort I just gave up, to spare myself any further exasperation.

Posted by: dearieme | Jun 24, 2005 11:37:52 AM

Perhaps my comment above is too obscure. What I mean is that you can put aside the impossibility of tracking people's weekly income. The sods couldn't even keep track of the existence of a British-born UK citizen who had a passport, who even, courtesy of her weekend job, had a National Insurance Number, had paid National Insurance and had even paid income tax. And still she didn't exist, according to them. Ye Gods and Little Fishes!!!!

Posted by: dearieme | Jun 24, 2005 11:43:19 AM

Dearieme,

If your daughter is indeed non-existent in the eyes of the Inland Revenue, I suggest you start transferring some of your wealth and assets to her immediately.

Provided she's not in those bloody awful teen years where she's likely to blow the lot on whatever teenage girls blow their money on.

Posted by: Tim Newman | Jun 24, 2005 12:18:21 PM

Can I claim your tax credits dearieme? I just pay too much tax!

Alternatively I've also thought of fathering 26 children (so I can take the entire year off (2 weeks off/sprog).

Does anyone else have any ideas how I can claim to the max? I've given up with the idea of working as i get punished so badly for it, so I thought, lets go with the flow and try and get rewarded for as many anti-social things as possible. A sort of Super-Size my benefits!

Posted by: Rob Read | Jun 24, 2005 12:33:56 PM

[There isn’t a single organisation in the world, public or private, that knows how to deal with the changing circumstances of 60 million people, the transient rises and falls in income, and respond to them in a timely and efficient manner]

Not at all true. Child Benefit works fine and so does PAYE. This was a specific failure of the people who implemented this system and one for which they should be held to account. In general, civil servants are let off the hook far too easily in cases like this because of an incorrec perception that the task is intrinsically impossible. Btw, there are 60 million people in the UK, but many fewer taxpayers.

[Mithering about on the subject of whether our homegrown chavs and scrotes should get a little more per week in their baccy allowance when we should be hammering away at the problem of how to increase the wealth of the world is morally obtuse. Currently, even if we redistributed everything in an egalitarian manner across the 6 billion there would still be absolute poverty.]

Not true and not true. Global GDP is about £50trn. 50,000 divided by six is 8333. The threshold of "absolute poverty" is defined by reference to material deprivations of things like water, shelter etc rather than as a monetary amount, but since the WHO uses a rule of thumb of $2 a day, I think it is quite difficult to argue that $8000 a year would be absolute poverty.

And as Michael Marmot's work shows, inequality is in and of itself a driver of poor health outcomes. So it's not necessarily wrong at all to worry about inequality at the same time as economic growth. The proposition that inequality only matters when it leads to absolute deprivation is one which is more or less thoroughly falsified.

Posted by: dsquared | Jun 24, 2005 2:15:01 PM

"a driver of": gosh, that's almost as good as a "risk factor". Nothing so vulgar as a "cause", then?

Posted by: dearieme | Jun 24, 2005 2:22:18 PM

Child Benefit works because the amount doesn't vary up and down on a weekly basis - you know what to pay, and for how long.

P.A.Y.E. works because your employer has full knowledge - he/she knows what they have paid you, what your tax code is, and thus how much to pay you and how much the government.

Tax Credits have no idea about your circumstances are on a day to day (or weekly) basis. It's like trying to hit a moving target whilst blindfolded. You might think it incorrect to consider this to be "intrinsically impossible", personally I'd rather just say that it's as near as dammit.

Posted by: David Wildgoose | Jun 24, 2005 2:28:06 PM

...about WHAT your circumstances are on...

[Repeat after me: I must remember to preview]

Posted by: David Wildgoose | Jun 24, 2005 2:30:38 PM

Not at all true. Child Benefit works fine and so does PAYE. This was a specific failure of the people who implemented this system and one for which they should be held to account.

I think you selectively ignored the words "changing circumstances". This is not a specific failure. The entire system is based upon previous years income and relies upon people telling the revenue when their circumstances change.

Two friends of mine split up recently and have to pay back over £5000. Needless to say they cannot afford to pay it back and still have no idea how they got caught up in this situation.

Whilst the intentions of the system are noble, the implementation is severely flawed and overly complicated. This problem is not going to go away in a hurry.

Posted by: Allan Scullion | Jun 24, 2005 2:33:18 PM

Whilst the intentions of the system are noble, the implementation is severely flawed and overly complicated.

This applies to almost any topic which the left hold dear.

Posted by: Tim Newman | Jun 24, 2005 3:39:04 PM

No, Tim, no: in 1900, I suppose, one could assume some sort of nobility for the left. After a century of seeing them in power, that would be absurd. Wiser to assume that they are driven by a combination of seeking the chance to congratulate themselves on appearing noble, and of creating jobs-for-the-boys in overseeing purportedly noble systems.

Posted by: dearieme | Jun 24, 2005 3:45:24 PM

I've given up with the idea of working as i get punished so badly for it

Wow! There's people out there who'd pay for that sort of treatment you know!

Posted by: N.I.B. | Jun 24, 2005 3:47:10 PM

N.I.B. I got a fine from the State that came to over 40% of what I was paid.

They can't rule out another one next year either.

The only way to avoid being fined by this department is to stop working. If I do they said they'd get me a free house and pay my bills! What's there to lose?

Posted by: Rob Read | Jun 24, 2005 5:40:45 PM

Rob, it was a joke.

Jokes aren't taxed (yet), so you are allowed to enjoy them...

Posted by: N.I.B. | Jun 24, 2005 7:41:36 PM

If personal tax allowances been increased to say £8-10,000 for everyone, "hard working families" would have been rewarded without this bureaucratic nightmare being required.

Posted by: Snafu | Jun 25, 2005 6:19:21 PM

One line of Toynbee's that sticks in my craw is the 'undeserving' tag affixed to the word 'rich'. I can scarcely think of one wealthy person I know who has not deserved every penny. I'd also be willing to bet that Polly's definition of rich and mine differ by at least an order of magnitude (anything under about £500,000 a year is just 'comfortably well off'.)

Posted by: David Gillies | Jun 25, 2005 8:22:51 PM