Anything Essay Example | Topics and Well Written Essays - 500 words - 7

Anything - Essay Example As Hands notes, life has become difficult for millions of families. The median gross full-time weekly earnings have fallen, in inflation-adjusted terms, by 9% since 2008. Living standards for many households have been flat, at best, for much longer. During that same period, the value-added tax, which hits low-income workers hardest, has been raised to 20% (21). It is imperative to come up with means and ways to lift the incomes of those who are poorest paid. If the minimum wages are increased, this should correspond to changes in the tax code. If this were not put in consideration one-third of every pound in wage increase would be taken by the Treasury. What politicians who proclaim an increase in the minimum wage are less keen to share is that only 68% of every extra pound in increased wages actually reaches the pockets of low-wage earners. The rest is taken by the Treasury through a 20% income tax that applies to every pound of earnings above  £10,000 per year equivalent to aroun d 39 working weeks at 40 hours per week on the minimum wage and a 12% national insurance deduction on earnings above  £8,000. For the many who will also see their in-work benefits reduced, the effective marginal tax rate is more than 32% (Hands 21). This is why the claim of raising the minimum wage is a traditional method that is used by politicians. If the wages are increased the government gets credit but, on the other hand the tax revenues increased and worsen the situation. This shows that a better way to help the low-income earners is by a complete tax reform. The national insurance paid is nothing more other than tax by another name. While there has been considerable progress in raising the threshold for income tax, politicians are conspicuously quiet about doing the same for national insurance. The result is that someone working 40 hours at the minimum wage