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B484 - Welfare and Tax (Amendment) Bill 2012

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    I'd rather leave it up to the courts and individuals within a household to sort that out, to be honest. Trying to cover everyone's affairs in legislation is tricky.
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    (Original post by jesusandtequila)
    I'd rather leave it up to the courts and individuals within a household to sort that out, to be honest. Trying to cover everyone's affairs in legislation is tricky.
    Can you link me to the legislation governing housing benefit please.
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    (Original post by paddy__power)
    Can you link me to the legislation governing housing benefit please.
    5 Housing Benefit
    (1) Housing benefit is a statutory responsibility of county councils.
    (2) It is administered and funded by local authorities.
    (3) Rates, eligibility criteria, and taper rates are decided by county councils.
    (4) Country councils' plans must meet the following minimum criteria:
    (a) Anyone with a household income of below £16,000 and savings of below £16,000 must be eligible for 100% of their rent up to the 20th percentile of rents for a dwelling with a number of bedrooms equal to the number of people in the dwelling.
    (b) For an individual renting a room, section 3(4)(a) will apply, and it is defined as a 1-bedroom dwelling.
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    (Original post by jesusandtequila)
    5 Housing Benefit
    (1) Housing benefit is a statutory responsibility of county councils.
    (2) It is administered and funded by local authorities.
    (3) Rates, eligibility criteria, and taper rates are decided by county councils.
    (4) Country councils' plans must meet the following minimum criteria:
    (a) Anyone with a household income of below £16,000 and savings of below £16,000 must be eligible for 100% of their rent up to the 20th percentile of rents for a dwelling with a number of bedrooms equal to the number of people in the dwelling.
    (b) For an individual renting a room, section 3(4)(a) will apply, and it is defined as a 1-bedroom dwelling.
    Okay thanks. In which case I am broadly fine with the statement I quoted. Just wanted to make sure that anyone being withheld their money could simply move out and have it instantly paid to them. Can I confirm (and could you include for clarity) the fact that somebody renting a room in a shared house would have that room counted as a separate household?
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    Dry!

    That was an antarctic desert to get through.

    <3 x
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    (Original post by jesusandtequila)
    QFA
    I sent a PM about this but thought it'd be best for everyone else's sake if I just spoke about it here in the thread itself

    Much of what you've put in here is similar in scope to parts of our proposals in the Budget. Naturally it's not the exact same, but what I'm saying is that I think that this bill takes a similar direction to what we wanted to see. Obviously, the VAT abolition is the evident one, and we also made it clear that we want to shift the burden of tax away from income and more onto the GRT (though not completely) and that's what you've done here, though I'd personally have used a bit of the surplus to lower GRT a bit. Regardless, what I'm trying to say is that these similarities mean that we're in overall support of what you've outlined here.

    Anyway, we here in the Government would love the opportunity to officially second this, if you'd let us do so?
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    (Original post by Jarred)
    I sent a PM about this but thought it'd be best for everyone else's sake if I just spoke about it here in the thread itself

    Much of what you've put in here is similar in scope to parts of our proposals in the Budget. Naturally it's not the exact same, but what I'm saying is that I think that this bill takes a similar direction to what we wanted to see. Obviously, the VAT abolition is the evident one, and we also made it clear that we want to shift the burden of tax away from income and more onto the GRT (though not completely) and that's what you've done here, though I'd personally have used a bit of the surplus to lower GRT a bit. Regardless, what I'm trying to say is that these similarities mean that we're in overall support of what you've outlined here.

    Anyway, we here in the Government would love the opportunity to officially second this, if you'd let us do so?
    As I said in the Budget, I don't think increasing the deficit is a good idea when we have a ~£78bn deficit. Cutting GRT by a single percentage point would cause this Bill to be one where we widened the deficit by over £4bn. If government wish to support this, I'm glad - and I look forward to the Aye's in the Division Lobby. To say we have a surplus is false. It is a surplus on the Welfare changes that is kept track of here. So, considering we are running over £70bn in deficit, which bit of the surplus do you suggest using?
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    (Original post by paddy__power)
    Okay thanks. In which case I am broadly fine with the statement I quoted. Just wanted to make sure that anyone being withheld their money could simply move out and have it instantly paid to them. Can I confirm (and could you include for clarity) the fact that somebody renting a room in a shared house would have that room counted as a separate household?
    Yeah, I can add a clause in the second reading to insert into the main Act to clarify this.
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    (Original post by jesusandtequila)
    Yeah, I can add a clause in the second reading to insert into the main Act to clarify this.
    That's fine then.

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    Parts 2 and 3 are great.

    4 i would naturally prefer a flat income tax with a further increased threshold.

    1 is the part i do not entirely agree with and the reason i abstained on the welfare act. I do not like the first adult aspect, as individuals each person is entitled to an equal amount (if a married couple wish to they can have it in a joint account). Each child under 15 should receive the same (they should have it put into a trust fund or something until 16 so the parents do not dip into it).

    One final question, is the state still paying pensions or has this replaced them.

    1 Resident's Income
    (1) For Schedule 1 in Welfare Act 2012, substitute:
    Schedule 1: Rates Of Citizen's Income
    1st adult (16-64 years): £164.00 per week
    Subsequent adults (16-64 years): £94.00 per week
    1st pensioner (65+ years): £132.00 per week
    Subsequent pensioners (65+ years): £60.50 per week
    Child aged 12-15 years: £89.00 per week
    Child aged 5-11 years: £68.50 per week
    Child aged 3-4: £62.00 per week
    Child aged 0-2: £55.00 per week
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    (Original post by Rakas21)
    1 is the part i do not entirely agree with and the reason i abstained on the welfare act. I do not like the first adult aspect, as individuals each person is entitled to an equal amount (if a married couple wish to they can have it in a joint account). Each child under 15 should receive the same (they should have it put into a trust fund or something until 16 so the parents do not dip into it).
    It's based on the minimum needed to reach a minimum standard of living. 2 adults living in separate houses requires a greater outlay than 2 adults living together - since you end up duplicating many of the things. Since the point of Welfare is to guarantee a minimum standard of living, I think it's right that we've focussed it on this. As for children, the cost of maintaining a child increases with their age, hence the payment to guarantee the minimum standard must also rise.


    One final question, is the state still paying pensions or has this replaced them.
    Replaced the state pension/pension credit etc. Public sector pensions through a job aren't replaced.
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    (Original post by jesusandtequila)
    It's based on the minimum needed to reach a minimum standard of living. 2 adults living in separate houses requires a greater outlay than 2 adults living together - since you end up duplicating many of the things. Since the point of Welfare is to guarantee a minimum standard of living, I think it's right that we've focussed it on this. As for children, the cost of maintaining a child increases with their age, hence the payment to guarantee the minimum standard must also rise.

    Replaced the state pension/pension credit etc. Public sector pensions through a job aren't replaced.
    Perhaps but should the state really be discriminating against people choosing to live in 2 properties rather than one, i think not as people should be treated equally. I guess this boils down to our opposing feelings regarding welfare as i would rather the RI were used largely as a bonus for working with a minimal safety net for the unemployed as i do not agree that the current choice is 'work or die', i simply feel that those who are benefiting society the most via working and paying tax should be rewarded, additionally there is now no incentive for anybody to work part time as they can sit around and still get paid. I also do not agree with parents being able to use the children's RI, they have more than enough via their own RI and this will simply encourage the unemployed to breed for more RI payments.

    I can see the economic argument of giving consumers more to spend however the RI in its current state is not something i feel comfortable supporting.
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    (Original post by Rakas21)
    Perhaps but should the state really be discriminating against people choosing to live in 2 properties rather than one, i think not as people should be treated equally.
    How are they?

    I guess this boils down to our opposing feelings regarding welfare as i would rather the RI were used largely as a bonus for working with a minimal safety net for the unemployed as i do not agree that the current choice is 'work or die', i simply feel that those who are benefiting society the most via working and paying tax should be rewarded
    Well luckily we're trying to get paying tax to be as much away from 'working' as possible. So if you don't work? Refuse to work? You get welfare? Oh, but isn't it conditional on work? So you live...how? Working benefits them - that's why people do it. It's not some moral duty (we're getting into Soviet territory here - "From each according to their ability, to each according to their work") and I don't believe it should be forced.

    additionally there is now no incentive for anybody to work part time as they can sit around and still get paid.
    It depends on what their wage is. Yeah, they have no incentive to work for derisory wages - of course. That's no bad thing though.

    I also do not agree with parents being able to use the children's RI, they have more than enough via their own RI and this will simply encourage the unemployed to breed for more RI payments.
    D'uh, having a kid costs money too, you have to pay for them! Of course if you think a single mother with 2 kids can raise the whole family on £8K p/a, then sure. But considering that parents have the costs of housing, clothing, feeding etc. children I don't see why children should get this money when it's designed to uphold the minimum standard of living for the household.

    I can see the economic argument of giving consumers more to spend however the RI in its current state is not something i feel comfortable supporting.
    Nahuh, the economic argument comes from hugely withdrawing the taper rates (to 0%) and from arguing that the best thing a government can do to improve living standards is give people money - since they can then follow their own goals and desires and dreams.
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    What's this? No response to my rambling piece of scrutiny yet?


    This was posted from The Student Room's iPhone/iPad App
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    (Original post by JPKC)
    As I think I said last time, I disagree with having a flat rate of GRT, especially when that rate is so high. The wealth you are taxing, unlike income, is not necessarily liquid - the tax would really make it difficult for certain groups of people, even if it is the most theoretically legitimate (directly quid pro quo etc.). There's also the issue of ghettoisation; although I was sort-of on your side about this with the Welfare Act, I've changed my mind and now reckon that it would make it practically impossible for families that live in newly gentrified areas to remain in them. The area you live in will be completely determined by your social class, far more than in RL. All the bad consequences will just be accentuated by the rate increases.
    Yet it provides a tax break exactly where it's needed - the poorest and most dilapidated areas. I don't think that we should tax something because it's liquid, but rather because it's right - and that excluding others from land is the cost you impose and should be paid back to society.

    There's a one-off cost from landowners to everyone else with the implementation of the tax, but it won't lead to ghettoisation. These newly gentrified areas have this cost included in them already! It's just in the price. Indeed it'll be easier for poorer people to move to these areas since it's often harder to stump up the large up-front amount rather than a stream (because of liquidity constraints).

    So I firmly reject that charge.

    Regarding the RI, the only improvement to it I can think of would be to specify that the child's amounts get paid directly to the mother, as with the (now defunct) Child Benefit.
    Sure, it's a fair point. What happens (RL-wise) when the father has custody of the children after a separation/divorce?

    Edit: Hmm. There's no links in the Notes explaining the RI rates. Looking at the Joseph Rowntree Foundation's recent report, they say that the average single adult requires £192.59 per week. How are you getting this down to £165? I don't imagine the VAT difference can account for that much...
    Yeah, there is. Top spoiler. "The new figures are based on the 2012 Joseph Rowntree Foundation minimum income research - minus rent (since it's covered by housing benefit) and council tax (since it's abolished) and reducing prices by 8% (based on the pass-through from the RL cut in VAT to 15%)."

    Taking the breakdown in the full report (p.28-29), we can see that of this £192.59, £14.34 is council tax. This has been scrapped, so it's not a cost. This brings us down to £178.05. Reducing this by 8% (as I said before, based on the pass-through from the RL cut from 17.5% to 15% which reduced prices by ~1%, so 20% to 0% is 8%) gets us to a figure of £163.81 - which we've rounded up.
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    (Original post by JPKC)
    What's this? No response to my rambling piece of scrutiny yet?
    Apologies, I hadn't registered it. Replied now - just replying to this as I ****ed up the quotes previously.
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    (Original post by jesusandtequila)
    Yet it provides a tax break exactly where it's needed - the poorest and most dilapidated areas. I don't think that we should tax something because it's liquid, but rather because it's right - and that excluding others from land is the cost you impose and should be paid back to society.
    Not entirely true. Places like my own Mancunian suburb have the rich and the poor living relatively close to each other on plots of land that are similarly sized; a road full of Georgian mansions literally sit across the road from a council estate - the same dynamic is true of locales in lots of cities, especially London. So the price of the land a household is situated on is no accurate indicator of the inhabitant's wealth, and so the tax is not progressive in all circumstances (even if it does incentivise an increase in its progressiveness - if that makes sense) - a plot's value is determined by demand, gentrification of course leads to an increase in demand. A 1960s person that bought a family home in Notting Hill back when it was a bit slummy would find themselves paying unfair amounts. Likewise, a bourgeois individual living in a country mansion would only pay as much for their 1 acre as the farmer in the field next door. If it was a tax on the improved value of land then it'd be totally progressive, until then any progressiveness is largely a myth.

    There's a one-off cost from landowners to everyone else with the implementation of the tax, but it won't lead to ghettoisation. These newly gentrified areas have this cost included in them already! It's just in the price. Indeed it'll be easier for poorer people to move to these areas since it's often harder to stump up the large up-front amount rather than a stream (because of liquidity constraints).

    So I firmly reject that charge.
    The problem is, the process of gentrification can happen in a very short space of time - most people remain in their properties for longer than this period. It's not like they'd be particularly pleased about the market shoving them out of their neighbourhood if land value rose dramatically while they were living in it, it'd be economically prudent to make your neighbourhood as shoddy as possible in order to lower your tax bill.

    Sure, it's a fair point. What happens (RL-wise) when the father has custody of the children after a separation/divorce?
    He gets it. The idea is that the mother receives it except in situations where she's not suitable (i.e. because she's dead or absent from looking after the child).

    Yeah, there is. Top spoiler. "The new figures are based on the 2012 Joseph Rowntree Foundation minimum income research - minus rent (since it's covered by housing benefit) and council tax (since it's abolished) and reducing prices by 8% (based on the pass-through from the RL cut in VAT to 15%)."

    Taking the breakdown in the full report (p.28-29), we can see that of this £192.59, £14.34 is council tax. This has been scrapped, so it's not a cost. This brings us down to £178.05. Reducing this by 8% (as I said before, based on the pass-through from the RL cut from 17.5% to 15% which reduced prices by ~1%, so 20% to 0% is 8%) gets us to a figure of £163.81 - which we've rounded up.
    Ah, good.




    This was posted from The Student Room's iPhone/iPad App
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    (Original post by jesusandtequila)
    I'd rather leave it up to the courts and individuals within a household to sort that out, to be honest. Trying to cover everyone's affairs in legislation is tricky.
    Fantastic cop-out.

    Fair enough you don't want to completely detail how it's paid, but to have some sort of vague idea would be nice. You've said it's paid to households, but you don't have any idea of how this will actually work?
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    (Original post by davidmarsh01)
    Fantastic cop-out.

    Fair enough you don't want to completely detail how it's paid, but to have some sort of vague idea would be nice. You've said it's paid to households, but you don't have any idea of how this will actually work?
    It works how individuals wish it to. If someone is having their money withheld or there is a dispute, I'd much rather leave it to the common law process to figure it out. In addition, they can leave (with the support of Housing Benefit) and then receive RI as a separate household of their own. I don't see there's an issue here.

    People would send in a form detailing the number of people in their household. They would nominate either a single bank account or a splitting into several bank accounts of the total claimed. The government pays it into these detailed bank accounts. People can choose amongst themselves how they wish to arrange this. I don't see why the State should decide this for people.
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    (Original post by JPKC)
    Not entirely true. Places like my own Mancunian suburb have the rich and the poor living relatively close to each other on plots of land that are similarly sized; a road full of Georgian mansions literally sit across the road from a council estate - the same dynamic is true of locales in lots of cities, especially London. So the price of the land a household is situated on is no accurate indicator of the inhabitant's wealth, and so the tax is not progressive in all circumstances (even if it does incentivise an increase in its progressiveness - if that makes sense) - a plot's value is determined by demand, gentrification of course leads to an increase in demand. A 1960s person that bought a family home in Notting Hill back when it was a bit slummy would find themselves paying unfair amounts. Likewise, a bourgeois individual living in a country mansion would only pay as much for their 1 acre as the farmer in the field next door. If it was a tax on the improved value of land then it'd be totally progressive, until then any progressiveness is largely a myth.

    The problem is, the process of gentrification can happen in a very short space of time - most people remain in their properties for longer than this period. It's not like they'd be particularly pleased about the market shoving them out of their neighbourhood if land value rose dramatically while they were living in it, it'd be economically prudent to make your neighbourhood as shoddy as possible in order to lower your tax bill.
    Except you as an individual don't decide what your neighbours do regards improvements, and thus the shabbyness of the neighbourhood.

    Without the tax though, the cost is still there, it just manifests itself as an opportunity cost (the money you're missing out on by not cashing in on the increased land values). Let us not forget that with the increased tax, it comes only as a result of living in the nice neighbourhood. These people have exactly the same decision to make with and without the tax. Money vs. the nice neighbourhood. Individuals can weigh that up for themselves.

    I also reject the charge that the amounts are 'unfair' because they've increased over time. I don't see how that makes it unfair. They get the benefit from living in the nicer neighbourhood than before. If that's not worth it to them, then they can move - but it's the same choice as RL.

    Perhaps what we should do is stop falsely gentrifying these places and let the land value tax incentivise people to put their land to the most efficient use, and stop taxing improvements. Then we'll see that naturally neighbourhoods tend to become nicer all over.

    He gets it. The idea is that the mother receives it except in situations where she's not suitable (i.e. because she's dead or absent from looking after the child).
    This can be arranged, sure.
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