Friday, 3 September 2021

Regression

Tax can be progressive or regressive.

Progressive means those who earn more, pay more.

Regressive means those who earn less pay more (as a percentage).

National Insirance (NI) is a regressive tax, as just about everyone who works has to pay it, and has to to accrue benefits for retirement and so on.

With there now bing a shortfall in the labour market of hundreds of thousands with posts in many industries vacant, there will be a shortfall in tax revenue.

This was forecasted.

Except by Brexiteers and the Government, apparently.

Despite promising no new taxes, and claiming to have a plan for social care for the last two years, a 2% rise in NI contributions to fund social care is being mooted.

Even if there were no extra care to pay for, there is a shortfall in tax revenues from all those lorry drivers, fruit pickers, hospitaility workers who did not return to the UK once travel was allowed, as they can't because the Government set minimu limits on how much someone has to earn to live here.

And there isn't enough UK unemployed to fill the vacancies, because many are on maternity/paternity leave, sick, disabled or caring for family/friends, in short there is no mass of unemployed who can be trained to drive lorries, unless you take workers from another sector, of course.

Meanwhile the rest of us will have to pay more in tax, whether we can afford it, because of "sovereignty".

Choices have consequences, even if the PM himself denies them.

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