From: "Fred" 
Newsgroups: soc.culture.british uk.politics.misc uk.finance uk.gov.social-security
Subject: Re: The Great Tax Credit Rip-Off
Date: Wed, 17 Sep 2003 01:40:05 +0100


"Jeep Beep"  wrote in message
news:bk81pd$qjapo$1@ID-163347.news.uni-berlin.de...
> treated badly, but IMO the Tax Credit legislation is well thought out and
> addresses the issues that it is supposed to.

How can a calculation using an income two years out of date be well thought
out?

The ideal would be for an integrated tax and tax credit system worked out
properly in the same manner as PAYE.

Lets look at the present system of credit and say housing benefits:  The
effective rates of tax / loss of credit are quite amazing.  If you're a
standard tax payer, then you loose 23% in income tax, 9% in NI and 37% in
reduction of tax credit.  I make that an effective tax rate of 70%.  Call
that well thought out?  Sorry if the rates are a bit inaccurate but they
give you the picture.  Add to that say reduction of housing benefit of 65%,
reduction of council tax benefit of 20%, leads to an overall rate of
taxation of 95%.  Are you the sort of person that thinks a higher tax rate
of 40% + 1% NI is too high.  Just think of the lower-middle wage earner who
for every pound he earns can get just 5p in his pocket.

Well thought out???????????