18-Dec-2006
Let's starve the jobless into submission whilst punishing those who invest
This has to be one of the craziest ideas that I have ever heard.
Whilst I appreciate that it is not a pleasant statistic to report that 10% of the currently unemployed have relied upon benefits for at least 6 of the last 7 years, cutting their benefits is not actually going to help them into work.
Let's be realistic here - getting a job is a two way street - granted, the jobseeker has to do all that he can to market himself to get a job, but on the other side of the job market is the employer. I can't see employers rushing to employ someone who has been out of work for 6 of the last 7 years, can you?
Don't misunderstand me....I don't say that all is well with the benefits system. There have been too many reports of people with families so large that it does not make economic sense for them to go back to work, especially if they can get the council to knock two houses together to keep the family in one home.
I agree that reform has to take place, especially to subsidise risks that employers may take and to create an environment where it does make financial sense to go out to work, but let's remember the historic failures of YTS (Youth Training Scheme) that took youngsters into low paid jobs and allowed employers to operate their businesses on a subsidy with poor employment and training opportunities.
But, if the Government is on a roll looking at reforming the welfare state.....perhaps it should also look to readdress some injustices where people invest in their future, only to be penalised.
Three things come to my mind as an inequality when I choose to buy my home rather than rent.
1. If I fall unemployed when buying my own home, all I get paid is the interest on my mortgage, whereas if renting, I can claim housing benefit that may pay close to the full monthly rental. If I want to protect my mortgage payments, I am forced to take out an expensive insurance policy. Why such inequality?
2. If I have invested in buying a property and I require respite care in later life, my house can be taken away from me to contribute to the costs of it. Yet if I spend all my cash whilst healthy, the Welfare Stete will pick up the tab.
3. When I die, if I have invested in any way and especially in my home, my estate will be subject to inheritance tax even if my estate is fairly modest. Tax is at 40%, yet if I blow it during my lifetime, the tax would only be payable at 17.5% VAT - again, where is the equality.
These three points alone are enough to make someone say "why bother buying my house". Yet there is still something very special about saying that the money is being invested for yourself rather than the landlord. But it is still immoral for the government (and prior governments) to regard homeowners as wealthier and more able to take the extra taxes just because they have been thriftier and more sensible than those who chose to rent.
Yes......the benefits and taxation system in this country is in urgent need of reform, but let's not do it in a random way, picking off little bits and pieces for soundbites. Let's make it fair and transparent throughout the whole system.
The first party to cut through all this and come up with radical and equitable proposals will be the one that will truly appeal to the middle-upper classes (and me!!).
Link
Whilst I appreciate that it is not a pleasant statistic to report that 10% of the currently unemployed have relied upon benefits for at least 6 of the last 7 years, cutting their benefits is not actually going to help them into work.
Let's be realistic here - getting a job is a two way street - granted, the jobseeker has to do all that he can to market himself to get a job, but on the other side of the job market is the employer. I can't see employers rushing to employ someone who has been out of work for 6 of the last 7 years, can you?
Don't misunderstand me....I don't say that all is well with the benefits system. There have been too many reports of people with families so large that it does not make economic sense for them to go back to work, especially if they can get the council to knock two houses together to keep the family in one home.
I agree that reform has to take place, especially to subsidise risks that employers may take and to create an environment where it does make financial sense to go out to work, but let's remember the historic failures of YTS (Youth Training Scheme) that took youngsters into low paid jobs and allowed employers to operate their businesses on a subsidy with poor employment and training opportunities.
But, if the Government is on a roll looking at reforming the welfare state.....perhaps it should also look to readdress some injustices where people invest in their future, only to be penalised.
Three things come to my mind as an inequality when I choose to buy my home rather than rent.
1. If I fall unemployed when buying my own home, all I get paid is the interest on my mortgage, whereas if renting, I can claim housing benefit that may pay close to the full monthly rental. If I want to protect my mortgage payments, I am forced to take out an expensive insurance policy. Why such inequality?
2. If I have invested in buying a property and I require respite care in later life, my house can be taken away from me to contribute to the costs of it. Yet if I spend all my cash whilst healthy, the Welfare Stete will pick up the tab.
3. When I die, if I have invested in any way and especially in my home, my estate will be subject to inheritance tax even if my estate is fairly modest. Tax is at 40%, yet if I blow it during my lifetime, the tax would only be payable at 17.5% VAT - again, where is the equality.
These three points alone are enough to make someone say "why bother buying my house". Yet there is still something very special about saying that the money is being invested for yourself rather than the landlord. But it is still immoral for the government (and prior governments) to regard homeowners as wealthier and more able to take the extra taxes just because they have been thriftier and more sensible than those who chose to rent.
Yes......the benefits and taxation system in this country is in urgent need of reform, but let's not do it in a random way, picking off little bits and pieces for soundbites. Let's make it fair and transparent throughout the whole system.
The first party to cut through all this and come up with radical and equitable proposals will be the one that will truly appeal to the middle-upper classes (and me!!).
Labels: Inheritance Tax, taxes, welfare
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