We spend much of our time on this site discussing policies that could promote more growth, more jobs and greater prosperity. Most agree that a growing economy can offer more opportunities, and can lift propsects and living standards for many.
There is a considerable effort put into the alternative debate, the discussion of how you should distribute all the income and wealth we do have, whatever the growth rate. The politics of fair shares is especially popular at times of low growth or no growth. All elected MPs in the UK accept that there should be a progressive tax system, which takes more tax from the rich and less tax from the poor. All accept there should be a benefit system to give more state money to those who are ill, disabled, elderly, or unable to find a job.
I wish to explore this issue a bit more this week. I will be commenting on the degree of progression in our tax system, and the state of our benefit system. We need to look at Mr Duncan Smith’s proposed welfare reforms to make work more worthwhile. We need to ask if it was right to raise out of work benefits by inflation, when wages are rising by less.
I would be interested today in hearing from you about how progressive a system you think we should have in place. How much more tax should someone on £100,000 a year pay compared with someone on £30,000? Should benefits only be paid to people on lower incomes? If so what should the cut off levels be? Or should some benefits go to all taxpayers as of right? Is mean testing the fairest way of limiting taxpayer bills, or should the prudent on moderate incomes also be able to receive money from the state? Do means tested benefits send perverse incentives? Does it make any sense to pay universal benefits, so millionaires end up with payments? Should bankers pay more tax on their bonuses than footballers pay on their incomes?