Friday, February 10, 2012

They own land! Give them money!

Tax breaks for hiring a cleaner could save middle class thousands

"David Cameron plans to investigate whether the Swedish “maid credit” system could be transferred to Britain... Mr Cameron told delegates that he was keen to explore Sweden’s experience of “encouraging and helping women go out to work”... Specific services eligible for the tax breaks under the Swedish model include cooking, cleaning, gardening and child care. " What's most likely to get women into work is if their husbands are working. The welfare system is a prisoners' dilemma because if a couple is on benefits and one of them gets a job, they are no better off, they are only better off if they both get jobs. So there are plenty of no-earner and two-earner housesholds, but very few single earner households.

Posted by mark wadsworth @ 10:01 AM (1607 views)
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12 thoughts on “They own land! Give them money!

  • We don’t own land! Give us Money!

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  • Thecountofnowhere says:

    Crazy !!!

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  • excelent! hire your own wife as a cleaner and child minder, pay her £30k per year, which isn’t outragous, and take a £30k tax break. Or to be more sneeky, find a neighbour who’s wife doesn’t want to work, and pay each other equal amounts of cash and get anice tax break.

    There are just too many holes to be abused here.

    yet another stupid government intervention idea.

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  • Fantastic idea. I’ll take two Swedish Maids please!

    I think more necessities in life should be tax deductable – like fuel!

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  • I know what you’re trying to say MW, but this does not fit the Prisoner’s Dilemma model where each decision maker acts independently of the other, not knowing what they are going to do, and that the best strategy for them is the same, no matter what the other does. In your case, the best strategy to take if one’s husband has a job is to get a job too, but the best strategy if they don’t have a job, is not to take a job.

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  • OTOH, yes, fair point, but the statistics bear this out. Overall employment rate among women is (from memory) 70%, among married mothers with husband in work it is 80%, among single mothers it is 60% and among women whose husband is unemployed it’s 30%.

    This is a fine example of how ending the poverty trap gets people back into work. If your husband is working, there is no poverty trap as you are no longer entitled to much in the way of benefits, so the sensible response is to go out and get a job. I’ve no doubt that the same principle applies to men, it just so happens that women are a better control group

    In summary, in the absence of the poverty trap, we’d expect a far higher percentage of single mothers or wives of unemployed men to be in work (because they’d need the money/suffer no ill consequences from being in work) than married mothers of working men (who already have enough money to live on).

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  • It won’t work – the skivvies will just put their prices up in line with the tax relief – the tax payer will just end up footing the bill for the higher wages.

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  • Any tax cut like this is fabulous. It will save more money in welfare payments than it costs to the government.

    Why should the Middle Class pay taxes for unemployment benefit, when that money could be spent providing jobs, accommodation and a very nice standard of living for the unemployed? For a working class singleton, to look after kids, clean and live in a posh house in a nice neighbourhood, probably get moral support for study. It should be a no brainier. Why are we taxing people for this? The division of labor works, because the parents can now spend more time being productive, so it should not be punished.

    Only problem is, that inflation is the reason why parents have so little time, so of course, the real tax is government spending and inflation.

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  • OMG, Keith Thomas, what on earth did you just say.

    You admitted that this will mean that wages for cleaners will rise. Are you against them getting more money? Would you rather Mandarins got it in Whitehall? Even Socialists suggest that taxation should be progressive, but taxing cleaners? No, that is a transfer of wealth from the poor to the wealthy in Westminster.

    In the end, more people will provide better services when more money is available and a greater amount of better employment will be available. You will also see companies form who provide flexible agency services to households. For example, the Dad goes on a one week business trip and Mum needs support for a week. This would be great for the service economy because that kind of thing would become more viable.

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  • Better still, scrap all income tax for those earning below £12,000 and unemployment will vanish over-night.

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  • mark wadsworth says:

    Libertas: “Better still, scrap all income tax for those earning below £12,000 and unemployment will vanish over-night.”

    That would help of course, this is what I was trying to explain at 6. But far more important is to reduce means testing of benefits, it’s all well and good not paying any income tax up to £12,000 but if you lose £8,000 in benefits that has the same beahvioural negative effect as paying 66% income tax. If that means that basic benefit levels are reduced a bit in £ terms, but made non-means tested, then so be it.

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  • I would have thought that Cameroon et al already had a surfeit of Swedish/Thai maids to relieve them of the stress and everyday drudgery of domestic chores, what do they need with skivvies from the estates? Is he hoping for a return to the expectation that everyone not born to rule will go into service?

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