Those people have too much money, tax them more!
That seems to be the general thrust of this piece in The Guardian. Pensioners now, at least some of them, have higher disposable incomes than those still in work. This is appalling apparently and must be stopped. By imposing higher taxes upon pensioners:
That might be considered a good thing if it were not for the fact that the cost is unaffordable, is damaging the ability of British business to invest in the future, and fuelling inequality between generations and among the nation’s 12 million over-65s.
Those things could all be true but pensions are simply delayed earnings. Those people have worked for that money:
Perhaps the answer lies in an extension of national insurance beyond retirement , a care tax, or more transparently a separate tax regime for those who become eligible for the state pension. In short, pensioner income tax bands.
Pensioner tax bands would have lower thresholds for the higher rate of tax and the 45p rate, clawing back some of the inflated incomes many of the first wave of baby boomers enjoy from their guaranteed final salary pensions.
They received lower amounts in their weekly paypackets in order to pay for those pensions. Whether or not the pension payers saved enough to pay it is an irrelevance at this level. There was an employment contract which said some money now, some deferred into your pension. To change the rules now is not just akin to it actually is stealing their wages.
Pensioners on incomes above £20,000 a year will usually have paid off their mortgage and have few fixed costs apart from council tax and utility bills sapping their monthly bank balance. Some, we know, will be subsidising children and grandchildren on the bottom rungs of the pay ladder. Many have told the Guardian of their caring responsibilities. But the UK needs to avoid the situation in Greece, where pensions are untouchable because they have become the financial bedrock of extended family life.
The Greek problem is entirely different. There it's the state pension (s) which are too high. This proposal here is that people who, entirely in the private sector, deferred some of their income to later in life should now be rapaciously taxed because inequality.
And this is all in The Guardian, usually in favour of the workers being able to enjoy their wages.
It's also very much missing the larger picture. We've been working for well over a century now at sorting this problem of old people starving to death in their freezing homes as unable to work they have no income. Funding pensions was the solution. And now that the solution is working we've got to rip up a century's work?
The usual ignorance of incentives is also on display. We'd rather like the younger generations today to do a bit of saving too for their own old ages. And if we go out to nick all the cash off the people who did save then what's that going to do to those we'd like to save?
We regard this as an appalling set of suggestions and it seems to be driven solely by the idea that if anyone does end up with a bit of money then we musty, obviously, tax them more just because.