Tax credits should not be used to subsidise low-wage employers
|
Version 0 of 1. Owen Jones is right to highlight the plight of the working poor but wrong to suggest the answer should have ever been tax credits (Opinion, theguardian.com, 16 October). It can never be right to subsidise poverty-pay corporate employers with the revenue collected from low- and middle-income workers. Employers should be compelled to pay living wage rates. Of course the problem of the working poor was in part created by the sham of New Labour’s minimum wage legislation, which, far from troubling exploitative employers, functioned in their interests. Related: Cameron responds to Question Time tax credits complaint For most of its history the minimum wage did not match the basic subsistence package of unemployment, housing and council tax benefits. But it was still used as an excuse to take claimants off welfare and into below-subsistence employment – thereby increasing the pool of cheap labour and further suppressing wage levels. Those doubting the pro-employer nature of the minimum wage legislation should be aware that for its first 11 years it had no punitive dimension. Employers caught breaking the law merely had to agree to repay monies owed, to escape punishment and get away with the equivalent of an interest-free loan from their workforce.Gavin Lewis Manchester • Tax credits should be just a safety net that is hardly ever used (Former Tory voter breaks down on TV over tax credit cuts, 17 October). What is needed is a payroll tax based on the amount of subsidy required to pay employees of low-wage companies. The government should claw back pound for pound what it pays out to families from the companies that they work for. I am sure we have the data but it might mean joining information from HMRC and the Department for Work and Pensions – surely not that hard. Furthermore, we should have league tables. Companies can avoid this tax altogether by paying decent wages that remove their employees from tax credits. Having your employees subsidised should be a badge of shame.Brian FishLeeds • The Tories’ stated, and laudable, aim is to make work pay. However they seem unwilling to understand that tax credits are part of making work pay, and that it is unfair to cut them before wage rises remove their necessity. Moreover, no one seems to have pointed out that tax credits will of their own accord wither and die off as better wages are paid by employers.Michael Miller Sheffield Join the debate at guardian.letters@theguardian.com |