Rory Meakin

The Joseph Rowntree Foundation (JRF)  published a paper on Wednesday comparing a range of policies to help low paid workers. Perhaps unsurprisingly, they conclude that increasing benefits is the best option. Like so much analysis on poverty, the report suffers from policy myopia in two respects. First, it looks only at cash benefits and direct taxes, ignoring the policy choices which set the constraints of the problem. Secondly, wider implications of the options are ignored. Cost of living The report uses a basket of goods which determines a ‘minimum income standard’. But no attention is paid to policies which increase the cost of goods in that basket, save for childcare. And the only 'solution' offered is to increase subsidies.

'Isn’t there a case for looking at the whole system at some point?' whispered Isabel on Tuesday when MPs criticised the taxman again. Well, yes, there is. Last May, the 2020 Tax Commission published its final report, setting out the moral, economic and practical case for lower, simpler taxes. The Commission deliberated for 18 months before coming to a fundamental rethink of the UK tax system. It proposed to sweep away a multitude of fiddly taxes that hit the same income on multiple occasions and replace them all with a reformed, simple Single Income Tax. Simpler taxes would mean fewer loopholes for clever accountants to exploit while freeing up HMRC staff to concentrate on the things that matter: detecting evasion and helping taxpayers to pay the right amount of tax.