Paying tax at 90% - the poverty trap
The Independent carries an article today which flags up the disincentives facing thousands of households on low incomes. According to the piece, “A total of 60,000 households receiving income-related benefits or tax credits will face handing 90p of every extra pound they earn to the Treasury next year, twice this year’s total.... and the number of low-income households with a marginal tax rate of more than 60 per cent will grow by 85,000 to more than 1.9 million next year.”
The reason is the complex working of the tax credit and benefit system where working a few extra hours a week causes benefit recipients to lose means-tested (income related) benefits as well as having to pay more in income tax and national insurance contributions. Single mothers returning to work are thought to be especially at risk of the povert ytrap effect - currently, anyone working more than 16 hours a week loses their right to benefits.
This is an important issue - the effective tax rate paid by many thousands of people towards the lower end of the pay ladder can be twice that paid by the richest in society - raising questions not just about economic efficiency and incentives to work (key supply side issues) but basic fairness / equity.
Business with a social face
Business with a Social Purpose - Andrew Mawson on Social Entrepreneurship
It is all about the people not the structures. This seemed to me to be the core message from a tremendous talk by Andrew Mawson, the renowned social entrepreneur and cross-bench peer in the House of Lords who is renowned for his pioneering work since the mid 1980s at the Bromley by Bow Centre in East London, which became the UK’s first integrated nursery and Healthy Living Centre. And which is now fast becoming a beacon in providing the way ahead when it comes to building a legacy for the east end of London post 2012.
read more...»Anguished of Edinburgh
The BBC’ Business Editor Robert Peston offered a rapid fire tutorial in the credit crunch in his address to the Edinburgh Book Festival today. Some people have perhaps unfairly labelled him as “Pessimistic Peston”, the man who first revealed the state of the liquidity crisis at the Northern Rock in early September 2007. But he delivered an engaging and witty talk to a large group of the well heeled of Edinburgh who clearly have weighty financial issues on their minds.
read more...»Tipping Point for Restaurants
Do you regard yourself as a good tipper? Or is it something that fills you with dread everytime the bill for a meal comes round?
Who do you tip? Your hairdresser? Your taxi driver, cleaner or perhaps the person who delivers your groceries? Why is it considered routine to tip waiters and waitresses and hotel staff whereas good service at the check-out counter in a supermarket is rarely if ever considered worthy of an extra financial reward?
The Independent today launches a campaign for greater transparency and fairness in the restaurant industry when it comes to tipping staff and the distribution of money from service charges. I didn;t realise until today that money left as a tip on a credit card or paid as service change on a menu is legally the property of the employer to dispose of as they wish.
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