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waynezilla

Subsidies Rather Than Welfare

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The welfare system has been a bit of a hot topic lately, specifically how much it costs.

Would a policy of investing the money into revitalising industry and getting back to an economy which is at least partially based on labour and manufacturing versus finance be better ?

Just how far would the welfare budget go if it was put to a positive use, particularly rebuilding a sustainable (rather than bubble) economy ?

Discuss...

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And if we do that who are we going to sell these wonderful new products too?

The system needs cleansing as there's too much debt.

Until the system has been reset everything is futile, plus we can't all consume more and more tat no matter who produces it. How many TV's does the average person need?

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Why subsidise, when you can achieve the same thing by lowering people's costs?

DWP is already offering up to £2500 to employers for taking on people aged 25+ who've been unemployed longer than 6 months. Of course this doesn't help young people much :rolleyes:

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Guest absolutezero
The welfare system has been a bit of a hot topic lately, specifically how much it costs.

Would a policy of investing the money into revitalising industry and getting back to an economy which is at least partially based on labour and manufacturing versus finance be better ?

Just how far would the welfare budget go if it was put to a positive use, particularly rebuilding a sustainable (rather than bubble) economy ?

Discuss...

The long term benefit chavs wouldn't stand for it and would burgle your house and knock your granny over the head for her purse.

A lot of benefits are basically protection money,

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DWP is already offering up to £2500 to employers for taking on people aged 25+ who've been unemployed longer than 6 months. Of course this doesn't help young people much :rolleyes:

As a rule of thumb when you tax something, consumption of it decreases.

The government continues to raise the tax on employing people and it has further large increases in the pipeline.

It also taxes low paid workers at a very high marginal rate.

As an example a worker on 15,000 pa costs the employer 16200 with employers NI. That worker will take home 1023 per month which means that the tax on employment is about 24.2%. If you include local taxation i.e. council tax which is paid by the low paid (but not by the unemployed) the numbers get a lot worse.

By the time you have subtracted all available benefits (obviously depending on individual circumstances) the extra money earned at the low end makes it not worth the loss of time a job entails to some benefit claimants - usually those with a familly.

The only way to alter this equation is to either pay less generous benefits or stop taxing the lower paid at current rates.

And of course it is all part of the same issue, taxes have to be high because social costs are high, people are incentivised to stay on benefits because taxes are high.

None of this will be news to anyone, all politicians are aware of it, but it is just too hot a potato for anyone to deal with, so we just go on until the money runs out.

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As a rule of thumb when you tax something, consumption of it decreases.

The government continues to raise the tax on employing people and it has further large increases in the pipeline.

It also taxes low paid workers at a very high marginal rate.

As an example a worker on 15,000 pa costs the employer 16200 with employers NI. That worker will take home 1023 per month which means that the tax on employment is about 24.2%. If you include local taxation i.e. council tax which is paid by the low paid (but not by the unemployed) the numbers get a lot worse.

By the time you have subtracted all available benefits (obviously depending on individual circumstances) the extra money earned at the low end makes it not worth the loss of time a job entails to some benefit claimants - usually those with a familly.

The only way to alter this equation is to either pay less generous benefits or stop taxing the lower paid at current rates.

And of course it is all part of the same issue, taxes have to be high because social costs are high, people are incentivised to stay on benefits because taxes are high.

None of this will be news to anyone, all politicians are aware of it, but it is just too hot a potato for anyone to deal with, so we just go on until the money runs out.

The current welfare system also has very high overheads due to the way claims are assessed. £15-16,000 is around the cut off point for the vast majority of welfare payouts, I presume that is why you picked the figure?

With a shrinking overall number of jobs and increasing population competing for them, inevitably some people will be on welfare regardless of whether they want to work or not. Red tape combined with high tax and spend policy was already destroying our economy before the credit bubble popped.

Edited by HPC001

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