03/18/2010: "tax credits - slight of hand!"

should government be improving lacklustre efforts to increase private sector job creation, rather than focussing on giving taxpayer's money out in hand outs?

i believe they should.

when labour came to power in 1997, the UK had inward investment levels - companies running their businesses and factories in the UK - at record levels, so much so that we were envied by the rest of the EU, as we had more inward investment than all the other european union countries added together!

* the UK had one of the lowest small business tax rates in the EU
* the UK had one of the lowest rates of corporation tax in the western world
* pension funds of the workers here in the UK were the best in the western world and working well towards providing good levels of income for our retired population
* women could retire at 60 men at 65
* the numbers of businesses falling into foreign companies hands was very low as the legislation put in place by the previous conservative government protected workers, in that unless the worker's pension fund was matched or bettered, then no takeover could take place.

prior to a labour government in 1997, we had an environment that created and encouraged employment for the UK people.

today, we have a reactive labour government
- pension funds have been decimated by a 5% tax on pension fund profits and the removal of company takeovers bettering the worker's pension pot
- pension funds are no longer protected from company managements, in that the pension funds can now be used for investment in other areas of that company's business, paying off debts, new machinery, etc. so that when a company struggles or goes into administration, the pension pot is left bare and its the workers that suffer with a pension that is virtually worthless.
- corporation tax continues to rise
- small businesses are clobbered with ever increasing taxes
- workers are whacked by national insurance rises in the wage packet
- businesses going bust are at record levels
- retirement age for anyone currently 41 and under will rise to 68 years old, for both men and women (thats a 3 year extra working time for men and an 8 year increase in working time for women)

so what use are tax credits?
a staggering number of people now rely on a form of tax credits to survive, despite working full/part time.
liam byrne let slip on the bbc weeks ago, that more than 20 million people now claim tax credits!

a basic wage should be enough for anyone to live on.
the taxpayer is subsidising more than 20 million people just to live!
but is it really help?

for millions of people that are claiming housing and/or council tax benefit, this is slight of hand, as these benefits are lowered if claiming tax credit payments.
now take into account other factors:
- travel costs (kept artificially high by government to raise revenue via VAT)
- food and drink during the working day
- child care costs ( i know of several people who work all week just to cover the cost of childcare, but lose out as they have to continue to pay this childcare during holiday periods to maintain the child's place)

more often than not, when these factors are added into calculations, the costs outweigh the tax credit benefits.

any government representing the people of the UK should be pro active not reactive.
businesses should be free to start up and employ people, companies should be encouraged to invest here instead of other eu countries, why make a product in the UK and ship it into european markets, when its cheaper to make it in france or germany and sell it from there?

national insurance should be reduced, as this is income tax on wage packets by another name
small business should have its taxes lowered and beaurocracy scrapped
corporation taxes should be reduced - encouraging investment in the UK once again

the UK needs to get people off tax credits and return to a time when a person gets to keep more of their wages so a tax credit is not required just to live.
the more people off tax credits, will free up funds for reducing taxes and allow the UK to become competitive once again.
giving a tax credit with one hand whilst taxing people into reliance on a taxpayer funded benefit just to live, is misleading people and helps no one in the long term!