Fraser is quite right: it is absurd that higher-rate tax-payers are paid child benefit. Ben Brogan is also right to note – though of course he uses some pretty extreme examples – that some people will lose from this measure.
But this is not the case of the “squeezed middle”, it’s removing an upper-class benefit. Reading the Daily Telegraph you could be forgiven for thinking that half the country pays tax at the 40% rate. In fact just 10% of taxpayers make it to that bracket (though a rather higher percentage of families do). Certainly, the coalition’s plans will “hit” stay-at-home mothers in the stockbroker belt but, as the FT points out, that’s the virtue of this plan, not its vice.
You can’t possibly cut public spending without targetting the subsidised-wealthy. As the Chancellor says: “It’s very hard to justify taxing people on much lower incomes in order to pay the child benefit to some of the better off in our society.”
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