Friday 3 September 2021

Paying for care - tax rises incoming with bucket loads more statism

 Well to be honest the dinner was a pretty rubbish affair all round and now we face the bill.

The Covid bill, which is going to entail more and more to be spent on Healthcare as the Country ages and with worse health outcomes. Plus the nurses and doctors who deserve 15% pay rises, them too. 

Having seen the leaks from the Government that they are going to raise National Insurance, one of the most invidious taxes that hits both employees and employers, to pay for Social Care. 

Where is the capitalist and market answer from the Government? Surely the obvious solution is to create a subsidised insurance group, Government owned, that people could pay into and indeed have different level so potential care. This way if Tarquin is very worried about the family home, he could top up the insurance to make sure it did not get sold to pay for care. 

To me, why should the Government take this whopping amount of money to subsidise the middle class to keep their inheritance. It is another rubbish policy choice, rewarding the old (who don't pay NI anyway) and the middle class (who could afford the care). It is not great for high earners as they actually pay the NI and it will mean another drop income for them, when they already pay 37% of all taxes. 

What has happened to the British government over the last two decades, it has totally switched to always seeking more central power and tax raising. The Blair government's spited inheritance continues to affect us to this day. 


dearieme said...

"why should the Government take this whopping amount of money to subsidise the middle class to keep their inheritance." Zaktly.

John in Cheshire said...

Reducing the size of the Civil Service; perhaps by half; and reducing their pension rights and other benefits to the national average and prohibiting bonuses, golden hellos and goodbyes should avoid any tax increases.
As a cherry on the cake, reduce the number of MPs by half too and make their remuneration a matter for their constituents, and so paying them all the same regardless of how useless they are.

DJK said...

Agree that raising NI is a poor choice. But in a sense, that's the easy part. What nobody is addressing is how the extra social care will be delivered, and where the young workers will come from to provide that care. If we could work that one out, it might be possible to cost it and decide if 1% on NI is enough or over generous or whatever.

Anonymous said...

This is just another appalling and useless policy from a government which has frankly disgraced itself in almost every single significant task that it has undertaken.
I am a lifelong Tory voter and am disgusted with this mob of amateurish high tax, big state, anti-free market eco-loons.
If we have to accept that social care is the responsibility of the state, then I suppose capital gains tax on housing is the fairest way to fund it. Higher taxes on young working people, many of whom will never be able to buy, is totally unfair.

dearieme said...

"capital gains tax on housing is the fairest way to fund it": which is exactly why that method won't be used.
Owner-occupiers want their tax privileges to last forever.

Anyway, unless we returned to index-linking in CGT calculations the effect would be disastrous for people who've owned their current house for a long time.

How about applying CGT on death (index-linked)?

CityUnslicker said...

We know the curretn government are idiots and continuity May. We know this becuase they keep trying to implement stupid big state ideas from the civil service. No competent Government does this, they come in and criticise the civial service, try to shrink it and put it under control. they all fail of course, but that it the game. Thatcher, obvs, as the only example of a winner.

But this lot, they dont even try. If Labour were not such a total omnishambles they'd be getting my vote on the need to let the Tories have some time in the wilderness to find their animal spirits again and drop the deadwood. As it is, back to some small protest party, again.

Anonymous said...

“ It is not great for high earners as they actually pay the NI and it will mean another drop income for them, when they already pay 37% of all taxes. ”

What ? Or do you mean 37% of their salaried income are taxes. Lazy ambiguous writing. Not all income is taxed. Income outside of PAYE is subject to different rates. Let them eat cake.

Why give doctors and nurses 15% pay increases ? Stupid idea.

jim said...

Please Sir, Please Sir, I would have done it, but the nasty boys wouldn't let me. Can't see any useful scheme coming from Boris. Anything will be so hedged about with ifs and buts as to be useless.

Meanwhile a friend's parents went off to the care home to breath their last. They were very old and had the good grace not to last long. Only burned through a mere £180k so not too bad really. And got a discount from the funeral parlour - two in the same week - bona.

The real fun will start when the Uber and Deliveroo and Zero Hours generation get to dementia age. HMG will have to put them somewhere and auction off their cardboard boxes and sleeping bags and rental debts. This is the demographic/jobs timebomb facing the West. I had hoped HMG would use Brexit to get us ahead of the Frogs and Germans on this one - but no sign yet.

Perhaps an insurance scheme. When you reach 60 say dob in £10k for your free place - or pay full price or get the one-shot pill offer. What is not to like.

lilith said...

I don't think most of us end up needing social care.. We die in hospital or at home mainly. We think we wouldn't put up with it, turn our faces to the wall, but once dementia sets in, the survival instinct triumphs over the lord take me now instinct. Best not to get dementia. Which they are now thinking is "type 3 diabetes" ie. preventable with diet and lifestyle. Save yourselves!

lilith said...

Eg. If my old mum has toast for breakfast she falls asleep all morning and falls of her chair. If she has poached egg and bacon she's up and about.

Don Cox said...

"We know the current government are idiots"

MPs are supposed to be representatives of the people, and the Government is made up from MPs. So there should be the same proportion of idiots as in the general population.

The Civil Servants are supposed to pass examinations, and therefore should be more intelligent and knowledgeable.


Don Cox

James Higham said...

How about anyone paying in less than ten years funds his own health care?

Anonymous said...

OT, comment on a US blog

"I don’t know what the Scottish Referendum 2.0 is polling like right now but there’s a credible scenario that resettled Afghans in this clutch of refugees could be naturalised and hosted in Scotland. If Sturgeon can control them to vote SNP a mere 10,000 votes in a close election could end the Anglo Scottish union. These plane loads of Afghans could literally end the Union. Does Boris have a clue?"

CityUnslicker said...

Interesting if the bank benches have awoken to shout the emperor has no clothes.

E-K said...

I have no problem paying for my old age care with my house if my kids won't/can't do it.

What I DO object to, however, is having to pay double the care home costs to subsidise the person in the bed next to me.

Children should not expect to get full inheritance if they have not looked after their parents, though, in the case of my own the care home can come after years of family effort. Nothing is ever clear cut.

dearieme said...

"What I DO object to, however, is having to pay double the care home costs to subsidise the person in the bed next to me."

The reform of the Welfare State by the 1945 government was explicitly designed to fund freeloaders although Beveridge had warned against it.

Anonymous said...

Just so I understand...

Even if you have (say) GBP 10m net assets, HMG will fund the entirety of your care after you've coughed up the first 86k?

Have I understood correctly?

-- EC