October 04, 2006

Welfare for government

A nice little bit of knowledge from Stumbling and Mumbling on the soon to happen increase to minimum wage, guess who the person to benifit most is? Well not anybody getting it, obviously. It's Gordon Brown who gets the most money from an increase in the minimum wage:
She sees only 30p of every £1 rise in wages. The other 70p goes in higher tax or lower benefit - it's table 1.2b of this massive pdf. So, she gains £187.50 - if that is, she keeps her hours and job.
The minimum wage, then, is a way of transferring income from bosses to the Treasury, more so than a way of helping the low-paid.
There is a better way of helping people than a stealth tax with a nasty side effect of pricing the lowest paid out of work. Such as the Flat tax, Citizens basic income, and a fuck off huge personal allowance. Kind of like is being proposed by UKIP. But that might not be the best way to help government, and just think of the poor civil servants. How could they survive without their above average salaries and inflation proof taxpayer backed pension schemes? Little Tarquin's school fees won't pay for themselves you know.


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