Friday, 16 April 2010

Rise in National Insurance

Raising National Insurance really is a poor idea. Not only is it an increased tax on employees (justifiable in these times) but effectively a forced pay rise through the employer contribution (employers don't care how their wage bill is distributed only size). Total wage bill goes up (you can't shrink wages to compensate if they're on minimum wage). Shrink the wage bills and tax earning. Private sector taxed jobs is WAY better than discouraging employment by increased wage bills.

An NI rise is a tax on having employees. A tax on dividends fairly ignores a struggling business which is not making a profit. A tax on wages is pretty irrelevant since having a job in the first place is priority right now for most people. Taking a pay cut in real terms to keep your job makes perfect sense outside the public sector.

Cut minimum wage. Cut benefits. Cut National Insurance (or keep it the same for argument's sake). Cut public sector wages to encourage transition to private sector (cutting jobs is last resort). Tax private sector employee income.

Get people working almost no matter what they take home, and definitely don't discourage it.

0 comments: