Tag Archives: taxation

The election showed that people across the country welcomed a left-leaning set of policies. The financial crisis and the right-wing’s austerity response to it has left the country poorer and more unequal both financially and socially. By offering a comprehensive manifesto that showed a practical route towards more investment in the country, its institutions and its people, Corbyn and McDonnell have broken the assumptions of Labour Party policy-making since 1997. Political conversation in the UK has moved so far to the right in the last 20 years that social democratic polices commonplace across Europe are seen by the media as […]
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How should we pay for the NHS? Last month, a cross-party coalition floated the idea of a hypothecated tax, a tax devoted to a specific purpose, as a way of funding the NHS. People like the NHS and would be willing to pay more tax if the tax was devoted to that purpose, so the argument goes. This proposal does the rounds from time to time. Often this special “NHS tax” is linked to National Insurance (NI), which after all already meets a proportion of health costs, and appears to be a tax that is already hypothecated towards benefits and […]
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Alcohol produces externalities – costs that are imposed on others without their consent. For example, drinking is associated with crime and violence, road traffic accidents, costs to the healthcare system and lower economic productivity. Externalities are problematic because they are not reflected in market outcomes: consumers typically only consider the costs and benefits of drinking to themselves, and fail to consider the impact their drinking has on others. According to standard economic theory, externalities should be corrected through taxes which raise prices to reflect the social harm of a product. For example, if a pint of beer typically imposes £1 […]
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This article was first published by the Institute for Fiscal Studies and was jointly written by Paul Johnson.  It is republished with kind permission of the IFS. The government has started to send out information on how tax revenue is spent to individuals who pay income tax or National Insurance contributions. It has broken down spending into a number of categories. The biggest of these is “welfare”, which represents a quarter of total spending. State pensions also appear as a separate category, accounting for 12% of spending. In this observation we look at what counts as pension and welfare spending, and […]
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We started off paying for the National Health Service via National Insurance Contributions in 1912. Lloyd George’s slogan –  9d for 4d – was only the first of many attempts to pass off National Insurance as a pain free alternative to taxation.  The impression was created that by paying contributions people were building up a fund which would entitle them to future benefits.  It was very successful, and many people still believe it, but in reality it was, and is, a giant Ponzi scheme.  Today’s contributions pay for the benefits paid out now. “.. all the benefits in some sense […]
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The UK has a relatively cheap, efficient health system, fairly funded and provided. It also has a cheap, inefficient and deeply unfair social care system. But despite their frugality, the health and care system is entering another financial crisis prompting zombie calls for charges, private insurance and rationing. Whilst avoiding these traps, we should consider whether a progressive funding reform could set the NHS on a more sustainable footing despite the austere climate. In particular, we should look at the options for pre-funding health and care so that future generations of older users and patients can enjoy longevity without the […]
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In February 2013 the Government published the details of its plans to reform the state subsidy for long-term care of the elderly in England. These plans are part of the Care Bill published on 10th May. 1. A cap of £75,000 on the cost of care anyone would be expected to pay. 2. An increase to £123,000 (from £23,250) in the amount of savings you can have and still get help with the cost of care. A guarantee that no-one has to sell their home in their lifetime to pay for care The scheme will cost an extra £1 billion a year by […]
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The heaviest users of the NHS are children and older people though it is mainly those of working age who staff and fund it. In the early days of the NHS its expenditure on older people was restricted by the limited range and effectiveness of treatment available and the relatively low life expectancy following retirement. For a while therefore it was feasible to rely on a funding formula based on general taxation (especially with the prevailing steep tax bands and death duties). Over the succeeding decades the steady rise in life expectancy and the dramatic expansion of the range and […]
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