Child Benefit Scrapped For Higher Rate Tax Payers From 2013

You can sit and make up "what if's" until the cows come home, fact is they are in the minority. For the majority, this change will not be an issue. Ive never understood why everyone got CB regardless of their income.

Hell, I wish I was earning enough in the first place to be affected by this !

[Flyboy]

Originally Posted by Ignitionnet

No idea but it's irrelevant. This is being done to cut the structural deficit by lowering the welfare bill not to redistribute wealth. With that in mind it's as fair as it's possible to be while still achieving its' aim.

But why should a couple, who earn nearly ninety-thousand pounds a year, be treated better than those who earn less? I can see self-employed people fiddling their incomes to balance their earnings more equally, with their partners, to make sure that neither of them earn more than the high rate threshold. It will remove incentives for people to earn higher incomes, reducing potential growth in the economy and lowering tax revenues. If a self-employed person has earned forty-three thousand pounds by March, he is not going to want to earn anymore, becasue he will lose his child benefit. How will they manage self-employed people? Typically, their incomes are not calculated until the end of the tax year. If the previous year they earned less than the higher rate threshold, will they have to repay the child benefit for that year? If they can't repay it, will they be sent to prison?

[colin25]

Just scrap kids...then no issue.

I am then hoping that the apes manage to take over the world

[Flyboy]

Originally Posted by danielf

As said: the implementation is not necessarily fair, but the move itself is good in my opinion. Over a certain income individuals should not be looking at the state (or tax benefits) to support their children. And if you can't afford it you shouldn't have four or five children. Ideally, this would be tapered and looking at joint income. I think there is something to be said for avoiding the administrative cost of doing so though.

This is not a question about whether the state support the children of those who earn a middle income, this is about those who earn less, paying more than those who earn a high income. Then Boy George still has the audacity to continue to quote bad Disney teen movies.

As for your comment about affording children, that is a bit silly and a very stale cliché isn't it.

[danielf]

Originally Posted by Flyboy

This is not a question about whether the state support the children of those who earn a middle income, this is about those who earn less, paying more than those who earn a high income. Then Boy George still has the audacity to continue to quote bad Disney teen movies.

I think it is about whether the state should support the children of higher earners, and I think the answer is 'no'. You can argue over what you consider high earners, but the principle seems sound to me.

As for your comment about affording children, that is a bit silly and a very stale cliché isn't it.

No it's not. Why do you think it is? In fact, I think there is a case to be made for abolishing child benefits after the second child.

Originally Posted by Flyboy

But why should a couple, who earn nearly ninety-thousand pounds a year, be treated better than those who earn less? I can see self-employed people fiddling their incomes to balance their earnings more equally, with their partners, to make sure that neither of them earn more than the high rate threshold. It will remove incentives for people to earn higher incomes, reducing potential growth in the economy and lowering tax revenues. If a self-employed person has earned forty-three thousand pounds by March, he is not going to want to earn anymore, becasue he will lose his child benefit. How will they manage self-employed people? Typically, their incomes are not calculated until the end of the tax year. If the previous year they earned less than the higher rate threshold, will they have to repay the child benefit for that year? If they can't repay it, will they be sent to prison?

Great, so you're going to completely ignore Ignition's point about the structural deficit by simply re-stating your position.

Way to advance a discussion. Not.

[Flyboy]

Okay then, why don't they go after those who earn a higher joint income, rather than those who earn a modest single income?

Because the purpose of the exercise is to cut the structural deficit, not usher in a new age of wealth redistribution.

The moment you go beyond a basic check on whether there's a higher-rate taxpayer in the household, you're in to means-testing territory. Means testing processes do not save money, they cost money.

[danielf]

Originally Posted by Flyboy

Okay then, why don't they go after those who earn a higher joint income, rather than those who earn a modest single income?

I'm guessing it's because 1. It is cheaper to administer and 2. In reality there won't be that many with 'a modest income', as many families where one of the partner earns over £44k will be on dual incomes as well.

As said earlier, the measure is crude, but it's crudeness makes it cheap, and the general purpose of the measure is in the right direction. On balance therefore, I think this is a good move.

I should add that, until my recent spell of unemployment, I was earning enough to have been caught by this new measure, and as a single earner with my wife looking after then children as a full time mum.

However we used to look at our bank statement monthly and boggle at the amount being paid to us for the simple fact that we decided to have three kids. The money was nice to have, but we certainly didn't need it.

I aspire, in my new life as a self-employed person, to get back to that level of income, and I will not resent the removal of child benefit when I do.

[Flyboy]

Originally Posted by danielf

I'm guessing it's because 1. It is cheaper to administer and 2. In reality there won't be that many with 'a modest income', as many families where one of the partner earns over £44k will be on dual incomes as well.

Do you have any statistics to back that up?

It can't be much more expensive than the one they are going to use to identify those who pay tax at a higher rate.

Originally Posted by Flyboy

It can't be much more expensive than the one they are going to use to identify those who pay tax at a higher rate.

Do you have any statistics to back that up?

[Ignitionnet]

Originally Posted by Flyboy

Do you have any statistics to back that up?

It can't be much more expensive than the one they are going to use to identify those who pay tax at a higher rate.

I would speculate that the Chancellor, along with the DWP, have a better idea of the costs of these things than yourself.

This is far more controversial if you fancy a go at it.

[Flyboy]

Originally Posted by Chris

Do you have any statistics to back that up?

No I don't, but it makes more sense than, many families where one of the partner earns over £44k will be on dual incomes as well. Besides, such information it is not so much statistical, as it is practical.

[danielf]

Originally Posted by Flyboy

Do you have any statistics to back that up?

No I don't. You seem quite keen on quoting a family with two people earning £40k each though. How many of those are around?