This report in the Telegraph is wrong:
Workers are set to pay £468m a year in extra National Insurance contributions (NICs) as a result of Labour’s salary sacrifice raid.
Rachel Reeves, the former chancellor, announced at her last Budget that, from April 2029, a £2,000 cap would be imposed on the amount that can be paid into a workplace pension via salary sacrifice before contributions are liable for NICs.
At the time, the Office for Budget Responsibility (OBR) said that the Treasury would rake in £3.5bn in additional NICs in 2029-30 as a result, but there was no detail about how this cost would be split between employees and employers.
However, a new breakdown released under Freedom of Information (FOI) rules has revealed that businesses are expected to shoulder around £3bn of this tax hit, with workers paying the remaining £468m directly from their payslips through higher NICs.
Of course if they’d used me to write this it would have been correct but for some reason I’m banned from writing for the paper.
The issue here is that taxes upon employment income end up being paid by the workers, not the employer. It’s wholly standard analysis that this is so, that the incidence of things like national insurance, social security, is on wages, not upon corporate profits.
Thus that entire £3.5 billion is a rise in taxation upon the wages of the workers. That’s just the way it works out.
If our rulers knew this and decided to do it anyway then I’d at least admire their sneakiness. But what worries me rather more is that peeps like Our Ange will be believing that the £3 billion does in fact come from the employers. You know, that they’re simply ignorant.
We’re so lucky, right?
Aneurin Bevan was “founding father” of the NHS and played a major role in creating the welfare state.
“In the House of Commons on 23 April 1951, Bevan attacked Chancellor Hugh Gaitskell for taking money from the National Insurance Fund. He said the Chancellor had “stole[n] £100 million a year from the National Insurance Fund,” so that “the re-armament of Great Britain is financed out of the contributions that the workers have paid into the Fund in order to protect themselves.” He called this “not Socialist finance,” arguing it was wrong to use workers’ insurance contributions (intended for social services) to help fund the large rearmament programme while other sources of wealth remained untapped. “
I wonder how many people know this?
Right from the start NIC has just been another way of raising tax for general purposes as seen fit by the Government of the day, so the Income Tax rate appears to be much lower than it is.
It is why State pensions are not funded, just paid as welfare from the current account.
They keep raising taxes on capital but at the same time complain that the share going to capital doesn't fall whilst the share going to labour does fall. But they just won't change their belief that taxes on capital actually fall on labour. Because they don't want that to be true. Because then they couldn't punish capital with taxes...