Good policy is good policy wherever it comes from

Not that we’ve been known to be wholly supportive of Niesr over the decades but still:

Economic growth and productivity have lagged behind a host of other nations since the financial crisis, the National Institute of Economic and Social Research (Niesr) said, as it called on the Government to raise the threshold at which workers start to pay income tax in an attempt to boost performance.

We spent a decade making the case that the personal allowance - for both NI (both types) and income tax - should be whatever the full year, full time minimum wage income is. We even won the case intellectually but of course by the time it was phased in inflation had moved the target beyond what happened.

With the current about to be min wage of £12.21 an hour that means that personal allowance should be just pennies short of £24,000* a year. The logic here is unarguable, ineffable even. Here is the minimum amount your labour is worth. That’s what the claim about the very existence of a minimum wage is. If that’s true then the politicos don’t get to dip their wick in to build bat tunnels.

As we were demanding that 15 years back. By definition the minimum wage and personal allowance should be linked. If the Chancellor decides to change one then the other, by default, must also be changed. Why yes, this could indeed cost a lot. That’s the point, to make the Chancellor think about the costs of either and or both.

As we kept saying, as we’ll keep on saying. If you want the poor to have more money then stop taxing them so damn much.

Tim Worstall

*Yes, we know average work week is more like 37.5 than 40 but poorer people do tend to work longer hours