"a tax on jobs"

[eFestivals]

Before the election the tories ridiculed Labour's plan to add 1% to the NI that an employer has to pay on each employee, calling it "a tax on jobs".

Once in power as the coalition, they abolished the plans to do that, again justifying it as "a tax on jobs".

Yet yesterday they approved a Labour-introduced scheme for new pension laws, which will require every employer to offer every employee a pension, with employers obliged to contribute 3% of that employee's wages.

I'm not against the pension idea despite the cost it'll be to me (over £1k a year), but I wasn't against the much cheaper NI rise either.

What I can't grasp is how come a 1% loading on a wage is "a tax on jobs", yet a 3% loading on a wage is not. How can the cheaper rise be an unacceptable cost, but a more expensive rise not be?

[RABun]

Before the election the tories ridiculed Labour's plan to add 1% to the NI that an employer has to pay on each employee, calling it "a tax on jobs".

Once in power as the coalition, they abolished the plans to do that, again justifying it as "a tax on jobs".

Yet yesterday they approved a Labour-introduced scheme for new pension laws, which will require every employer to offer every employee a pension, with employers obliged to contribute 3% of that employee's wages.

I'm not against the pension idea despite the cost it'll be to me (over £1k a year), but I wasn't against the much cheaper NI rise either.

What I can't grasp is how come a 1% loading on a wage is "a tax on jobs", yet a 3% loading on a wage is not. How can the cheaper rise be an unacceptable cost, but a more expensive rise not be?

[gratedenini]

Before the election the tories ridiculed Labour's plan to add 1% to the NI that an employer has to pay on each employee, calling it "a tax on jobs".

Once in power as the coalition, they abolished the plans to do that, again justifying it as "a tax on jobs".

Yet yesterday they approved a Labour-introduced scheme for new pension laws, which will require every employer to offer every employee a pension, with employers obliged to contribute 3% of that employee's wages.

I'm not against the pension idea despite the cost it'll be to me (over £1k a year), but I wasn't against the much cheaper NI rise either.

What I can't grasp is how come a 1% loading on a wage is "a tax on jobs", yet a 3% loading on a wage is not. How can the cheaper rise be an unacceptable cost, but a more expensive rise not be?

[Steve P]

What I can't grasp is how come a 1% loading on a wage is "a tax on jobs", yet a 3% loading on a wage is not. How can the cheaper rise be an unacceptable cost, but a more expensive rise not be?

[eFestivals]

Am I mistaken? A few years ago I remember getting paperwork through whereby we had to make sure all employees had the option of getting a pension.

Thing is... it all seems to be Peter to pay Paul.. and in any given scenario..there are going to be "losers".

Those measures you mention will cost the likes of Tescos millions..but it wont harm them.... but it could harm the likes of you and our lass.

By 2016 the employer is gonna have to pay 3% of employees salary over 5k with the employee paying 2%.

What get me is where will this extra money come from?

The cost of the service (vets) will have to rise..which might mean less people using the service...and therefore the risk of people being laid off.

Worrying.

den

Not sure what ytou saw a few years ago, but it doesn't apply to my company as yet.

As for the rest, you're out of date or mis-informed. The govt announced yesterday that every employer (no matter how small) will have to offer all PAYE employees earning a little over £7k a year a pension (the employee can opt out if they want) from April 2012, where the employee puts in 4%, the employer 3%, with the govt putting in 1%.

The costs to my company of this is around £1k a year - around 1.7% of company turnover.

Edited October 28, 2010 by eFestivals

[eFestivals]

Because their mates own the pension funds that all this cash will be invested in?

that's certainly one of the things which has occurred to me - already-rich bastards will have a greater control over the money of the 'oiks'.

[bunique]

Have you got a link to this somewhere Neil? Will be of interest to my mum!

[eFestivals]

Have you got a link to this somewhere Neil? Will be of interest to my mum!

amazingly, I can't actually find a news piece on the BBC website about it, despite it being one of the major pieces of political news yesterday.

However, I did find an explanation piece, which is probably actually better.

http://www.bbc.co.uk/news/business-11634494

[beLIEveR]

I don't mind the idea. But as Neil says there's a hypocracy there. More importantly, how much the employer pays should be dependent on how big that employer is. 3% seems like a reasonable average, but Grandma's Little Bakery being obliged to pay the same proportion of an employee's income into a national pension pot as Tesco doesn't sit quite right. Obviously two employees earning the same and paying the same contribution should get the same amount in retirement. But employers with the broadest shoulders should bear a slightly greater burden.

[eFestivals]

I don't mind the idea. But as Neil says there's a hypocracy there. More importantly, how much the employer pays should be dependent on how big that employer is. 3% seems like a reasonable average, but Grandma's Little Bakery being obliged to pay the same proportion of an employee's income into a national pension pot as Tesco doesn't sit quite right. Obviously two employees earning the same and paying the same contribution should get the same amount in retirement. But employers with the broadest shoulders should bear a slightly greater burden.

I actually disagree with that. All employers aim to make a profit at around the same percentage level - so there isn't really any difference between a small employer and large employer.

However, what's not been mentioned in anything I've seen is who will be bearing these extra pension costs. Given that all companies aim to make around the same percentage profit, and all have a profits target of some sort (some might have it explicitly stated, in other cases it'll be in the employer's head), then nothing about that will change with these extra pension costs (particularly for the major companies, who have shareholder expectations to meet). The extra costs will be covered by higher prices.

So ultimately it's a 3% tax on people's expenditure - which is yet another case of shifting the tax burden onto the poorest to the benefit of the richest (because the poor spend all of their income, while the richer people do not).

I'd not thought of that until now - so there's the real answer for their motivations Steve P.

[worm]

So ultimately it's a 3% tax on people's expenditure - which is yet another case of shifting the tax burden onto the poorest to the benefit of the richest (because the poor spend all of their income, while the richer people do not).

[Steve P]

I actually disagree with that. All employers aim to make a profit at around the same percentage level - so there isn't really any difference between a small employer and large employer.

However, what's not been mentioned in anything I've seen is who will be bearing these extra pension costs. Given that all companies aim to make around the same percentage profit, and all have a profits target of some sort (some might have it explicitly stated, in other cases it'll be in the employer's head), then nothing about that will change with these extra pension costs (particularly for the major companies, who have shareholder expectations to meet). The extra costs will be covered by higher prices.

So ultimately it's a 3% tax on people's expenditure - which is yet another case of shifting the tax burden onto the poorest to the benefit of the richest (because the poor spend all of their income, while the richer people do not).

I'd not thought of that until now - so there's the real answer for their motivations Steve P.

[eFestivals]

'So ultimately it's free to go to university - which is yet another case of shifting the cost of University onto the poorest to the benefit of the richest (because the richest have better access to education in early life, while the poor do not).'

I'm sorry Neil, but this stood out a mile when I was reading your Marxist critique of this tax law.

eh? What irrelevant and factually wrong crap are you banging on about now?

It will certainly be irrelevant and factually wrong crap, as that's all you ever do.

[lost]

this is copying the dutch system isn't it? reports suggest it works quite well over there

[llcoolphil]

I'd not thought of that until now - so there's the real answer for their motivations Steve P.

[llcoolphil]

eh? What irrelevant and factually wrong crap are you banging on about now?

It will certainly be irrelevant and factually wrong crap, as that's all you ever do.

[llcoolphil]

Yeah I'd agree with a lot of that. What it will also do is drive even more jobs overseas. If you're running a call centre for example it effectively makes british based staff another 3% more expensive compared to their Indian counterparts

[eFestivals]

Given the idea came from a commission set up under Blair and has been in development since, perhaps it would be the height of blind dogmatic stupidity to see this as a tory attack on the poor. Perhaps it's a way of making private and public sector pensions more equitable without actually dragging public sector provision into the gutter.

You've been calling for a greater emphasis on taxation over cuts, yet here is what is effectively a tax on the people you have called on to be taxed to help the people you have called on to be helped - and still you object! If Corporation tax was raised as you called for, who would pay for that? Higher prices etc etc etc

The problem you have Neil is that you are more ideologically dogmatic than the government and have developed an Ian Paisleyesque shouting response to every single thing it does. Here we have a policy that if you dont want to join in you dont have to as an employee, but if you do there will be extra cash going into your pension pot. Tell me what is wrong with that and what the alternative is.

I get that it's a labour idea - but so was the far cheaper on companies NI rise, that was ruled out by the coalition because it was "a tax on jobs", just as this is.

I also get that it's a plan that will - initially, anyway (until the costs are passed onto their customers) - hit the tories natural supporters, employers.

While I've been calling for a greater emphasis on taxation over cuts, what I've NOT been doing is calling for greater taxation of the poorest than the richest; I've not called for a rise in Corp Tax (tho have condemned the reduction in Corp Tax that tories are bringing in - that WILL NOT lead to prises reducing in the same way that a rise in Corp Tax would see prices rise).

I have called for equitable rises in taxation - completely different to the basis of all you're spouting here.

I'm dogmatic only to the extent that I won't accept the bollocks the coalition is spouting about 'fair'. Hitting the poorest harder than hitting the richest is not 'fair' on any basis.

What is the alternative? Equitable taxation, to fund a decent state pension.

It's a breeze.

Edited October 28, 2010 by eFestivals

[eFestivals]

It's neither irrelevant nor factually incorrect. The thing you are criticising here is exactly what you have been calling for and your criticisms of it can be made exactly on what you have said should happen with Higher Education funding.

And do try and come up with a response that doesn't involve you slipping into tourettes again. Ive proven you wrong already this week and Im more than happy to do it again.

It's both irrelevant and factually incorrect. I've called for nothing of the sort you think I have.

I think you need to re-consider the mis-placed pride you have for your own accuracy.

[llcoolphil]

I'm dogmatic only to the extent that I won't accept the bollocks the coalition is spouting about 'fair'. Hitting the poorest harder than hitting the richest is not 'fair' on any basis.

What is the alternative? Equitable taxation, to fund a decent state pension.

It's a breeze.

[eFestivals]

Describe equitable taxation to me. Tell what it really looks like, what it involves, what taxes you are talking about.

Because I think that, either directly or indirectly, you'll find that the poorest will always be hit hardest. It wouldn't matter if the poorest had an income of £100,000 pa, they would still be hit hardest. It is an inevitable consequence of being the poorest.

It's funny isn't it that when we're talking about HE, you are happy for the poorest to subsidise the better off because there is no truly fair system, yet when the government does exactly the same they're wrong.

The bit about HE - 100% wrong. Which just goes to show that despite your belief in your own accuracy, you're on a different planet.

The bit about the poorest always being hardest hit - 100% wrong. Which just goes to show you don't understand how taxation works.

And on the basis of you not understanding how taxation works, it'll be a waste of my fingertips to address the first part in any depth, because you won't understand it.

But essentially: all tax should be income tax.

Edited October 28, 2010 by eFestivals

[llcoolphil]

It's both irrelevant and factually incorrect. I've called for nothing of the sort you think I have.

I think you need to re-consider the mis-placed pride you have for your own accuracy.

[worm]

It is an inevitable consequence of being the poorest.

Edited October 28, 2010 by worm

[llcoolphil]

And on the basis of you not understanding how taxation works, it'll be a waste of my fingertips to address the first part in any depth, because you won't understand it.

[eFestivals]

Dear oh dear.

Let's do it in small steps shall we.

1.You have criticised this new pension policy because it puts greater costs on the poorest than the richest.

Incorrect. I've criticised it because it puts greater PROPORTIONAL costs on the poorest than the richest.

2. You support maintaining the status quo in HE funding because it cant be made any fairer and even though it places a greater burden on the poorest to the advantage of the better off.

What utter nutter crap.

I've said nothing at all remotely like that. It's the complete opposite of what I think and what I've posted here.

Now either you oppose taxing the poorest to benefit those better off or you don't. What you can't have is opposing it when someone else proposes it but offering it as the fairest system when it is you proposing it.

Now before you go off on a rant, if you dont accept this I will pull your posts up and prove what you have said.

Pull up those posts matey boy (except you can't) - you're on a hiding to nothing.