Let’s tax the poor working part time on minimum wage!

We here, along with the lads at the Centre for Policy Studies, spent a decade insisting that the personal allowance for income tax (and national insurance in our case) must be raised. Rasied, at least, to the full year, full time minimum wage. We’re not in favour of even the existence of a minimum wage but if there is to be one then the claim is, obviously, that this is the minimum that labour is worth. Therefore the grasping spendthrifts do not get to dip their wick into that minimum righteous amount that labour is worth. One of the ways we belaboured this point was that every year the “living wage” calculation came out we ran the numbers to prove that if the minimum wage were not taxed then it would equate to - and was sometimes higher - than the cash received amount of that living wage when taxed. That is, everyone could gain that living wage if only politics were less spendthrift and financing the micturation by taxing the poor.

So, we won, the allowance was raised to £12,500 - the importance of that number being that that was the full year, full time, minimum wage when the ambition was announced - and yet here we are again:

Rachel Reeves is expected to freeze income tax thresholds in her autumn Budget to fill a £40 billion black hole.

We regard this as an outrage.

We’re wholly fine with a progressive taxation system - Adam Smith’s more than in proportion. We also note that there’s a limit to how much can usefully be plucked from the fatter geese - that Laffer Curve. But we also insist that taxing the incomes of the poor so as to finance the spending plans of the fiscally incontinent is a moral outrage. The correct outcome is not to tax the poor more - to have a taxation system, as we do now and will increasingly as the allowances are frozen where someone working part time on minimum wage is paying income tax - but to limit the spending to what can be paid for without taxing said poor upon their incomes.

Sure, sure, we all want the poor to have more money. So stop damn taxing them.

Tim Worstall

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