A subsidy by any other name

Previously I said George Osborne was talking nonsense when it came to describing child benefit as an example of the poor subsidising the rich. However my response was less to do with what he was saying and more with why he was saying it; what I should have said is that I agree with him.

There are two main criticisms against removing child benefit from high earners. The first is that universal benefits are cheaper to administer than means-testing – which is correct and why the government settled on an imperfect solution of using the income tax system as a cheap and easy test. The second is that as a result, a couple who are each on an income in the standard tax bracket will be able to keep the benefit even though their combined salaries could exceed that of a couple who lose out because one of their salaries is in the higher tax bracket. This is unfair, but no more so than the idiosyncrasy that already exists with a progressive tax system where a couple earning £30,000 each will pay far less tax than a couple with a single wage of £60,000. Fix this anomaly (if you dare) and everything falls into place.

If we ensure the cost of administration remains comparatively cheap there is no justification for universal benefits. That the better off more than pay their way isn’t in dispute, however it isn’t relevant. What’s important is the simple logic reminding us that an increased tax liability from giving a benefit to the rich (or indeed anyone) is paid for through the taxation of everyone else. To quote Harold Wilson:

One man's wage rise is another man's price increase.

Avoid the word subsidy if you wish, call it an entitlement if you must, but the poor will definitely pay.

Not so fine

Damn it, I have been laid low by a Tesco finest steak pie or possibly a bug that I’ve caught from Mrs R – it’s safer to blame Tesco. It was a rubbish pie though, I’d have preferred a steak bake from Greggs and I base this seemingly harsh judgement on a globby bit of fat that left me unable to eat the rest. A reminder that if I want really good food I should skip the supermarket convenience and make the most of the farmer’s market, though it only visits twice a month. To top it off the re-packaged Tesco vanilla cheesecake to which they’ve added a hint more vanilla essence, the word “finest” and an extra thirty pence, is no better than the previous version. Why am I surprised?

A rant on all your taxes

Universal benefits, what are they good for? I’d have said “absolutely nothing” but such benefits have become a mutated refund from a labyrinthine tax system, one that leaves us unable to calculate our actual tax burden or even an estimated average that you can trust. I like Paul Waugh’s description of child benefit as a token rebate for those where the benefit is their only ‘take’ from the state.

Judging any tax in isolation is completely pointless but it won’t stop childless people complaining that they subsidise the rest, or George Osborne on a similar tack telling us that it’s ‘unfair’ for the poor to subsidise the rich; I admire his chutzpah but he's talking complete bollocks. The chancellor is doing the right thing but for the wrong reasons and his real reason of course is to make any subsequent cuts more palatable. Such nonsense reminds me of the good old days of another kind of cut, a tax cut, and the obligatory interview with your average family who would lament “it’s not fair for others that we’re being given this money”. You’re not being given anything you idiots, they’re taking less away!

You can’t judge a tax by its name. No one believes that vehicle tax and petrol tax is spent on road maintenance or that it discourages us from driving. Despite this we’ve had numerous attempts at introducing another ‘green’ tax, a road tax; that would be three taxes that I’d have to pay to be able to do one thing - drive to work – all so I can pay more tax.

Contributing according to my means is a duty I gladly accept but I object to a deliberate obfuscation of how much I’m paying, whether it's through the creation of new taxes or additional taxes on something that is already taxed, and then throwing in populist ad-hoc universal rebates such as child benefit or even the winter fuel allowance. Removing the universality of child benefit is one tiny step in the right direction and a simplified universal credit system may prove to be another. Let me at least understand my liability rather than hide me from the truth.

Something something something dark side

Inspired by Mark Pack who generated a Wordle for Ed Miliband's speech at the Labour party conference, I decided to generate one for my blog. The new leader’s predominant word was “generation”, mine was… “something”. Surely something’s amiss?

Bull’s-eye

In the end I have to confess to getting a little confused distinguishing between David and Edward Miliband but then I was hardly a stakeholder in what happened. Is it a good result for the Conservatives? At first I wasn’t as sure, David Miliband was a known quantity and whenever I thought of him I thought of Tony Blair and not in a positive way. Ed on the other hand is less well known and unknown equates to dangerous.

But I can see why the Conservatives prefer Ed to David, for all David’s association with the past this was hardly something that the Conservatives could use effectively against him, this was something that worked against him for those in his own party. Ed Miliband on the other hand had the support of the unions, even better he was elected thanks to the votes of union members, members who don’t even have to belong to the Labour party yet can have a say in who leads it. This is something that works against him for those outside the party; you might as well paint a bull’s-eye.

I browsed a few left-leaning forums today to gauge the mood and rather typically those daring to suggest a weakness were being slapped down rather than engaged in debate. I have no problem with Unions donating to the Labour party but the incongruity of an organisation being able to use funding to buy votes for its membership - which is how it will be portrayed - isn’t something that can be easily explained away. This ought to please me as it makes them less electable, yet strangely it doesn’t because whilst they continue to live in their bubble world I continue to be denied a credible choice.

Sent from my Nokia

My sister-in-law came to visit not so long ago and to keep her children occupied I switched on the PC. The eldest daughter (who was only nine) asks “What operating system is it?”

“Windows”, I replied.

To which she shuddered and went “EUW!”

You see, their parents are Apple… enthusiasts, and the brainwashing starts so early these days. I repeat: I would possibly (probably?) buy an iMac if I could afford one; because when I mentioned this episode the other day I got the impression I’d inadvertently come out as anything-but-Apple - a heretic if you like. This is grossly unfair, I would never disrespect anyone’s software/hardware proclivities, though I’d like to know the difference between the new Shuffle, at £39, and the new Nano at £129, beyond the ability to see what it is you’re playing.

Troika

I wanted Wave to succeed because, of the big three, I like Google the most – or should that be I dislike them the least? There’s something sad about Microsoft compared to how it once was. I can’t afford a new PC so I’ll not see Windows 7 for a while yet I’ve heard good things. In other areas though they remind me of IBM in the 1970’s; using FUD and the threat of legal action to coerce companies into paying for a licence to protect them from patents that they may (or may not) have infringed. It’s cheaper to pay up than defend yourself – which makes Microsoft sound less like IBM and more like the mafia.

Of course if I had the money I’d skip the PC altogether, buy an Apple Mac and sync my iPhone to it over and over again, if I could afford an iPhone. They're so lovely, but there’s something not quite right and it’s not the control freakery or the fanboys… no, that’s not true, it is those things. Years from now someone will find a decaying Apple II in the attic of Steve Jobs’ mansion and then we’ll discover the awful truth. It’s rather like the sinister and incredibly popular series Friends, everyone looks perfect and you’d like to copy the look but you know things will turn ugly if you dare to sit on that sofa. God help you if you bring your own chair.