My argument that national insurance should not be used to fund inreased spending on social care made it to The Mirrior this morning:
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Using NI seems an entirely cynical approach. It’s surely another move to redistribute wealth to those who would most likely vote Tory. Just as ‘levelling up’ really means spending money in Tory voting constituencies.
As far as am aware, NI was supposed to be a form of qualifying payment to access the health system, not a tax to cover the cost of it.
It was not created from ‘tax and spend’ – it was brought into existence by political will – the will to create it and fund it going forward.
The argument should be exactly that in my view – why are they messing about with NI? The British people have been qualifying for being able to use the NHS for years, yet the service is declining and every year seems to see a service aspect withdrawn or rationed. This is just changing the rules and the Government is simply going back on its post war word to change things.
Yet again these politicians are getting away with making their own ‘reality’.
I don’t think one of the options you mentioned was putting the increase on income tax eg. 1p – which would then presumably cover everyone equally including high earners and investment income. Would that not also be a better option?
Better
But still deeply suboptimal
In addition to being both unnecessary and damaging at this point in the economic cycle, adding a penny to income tax or NICs (or indeed VAT) exacerbates the problems inherent in the tax system already. Not least, the chronic and deliberate undertaxation of unearned income and capital gains (or if you prefer, the relative overtaxation of employment).
The issue of social care is a complex problem that cannot be solved by any simplistic proposal, like adding a penny to any tax. The proposal is a distraction. (Oh look, we are not talking about Afghanistan or Brexit or Coronavirus any longer… )
But I fear it well go through on the back of (a) national support for the NHS and social care (who can object to giving more money to the health and care services?) (b) toleration of NICs as a form of income taxation with a friendly face (who can object to paying their “stamp”?) (c) perhaps some echoes of the Lib Dem’s repeated symbolic plea for a “penny for the NHS”.
This is focus group taxation gone mad….