Tax the pensioners till the pips squeak

Attention continues to be focused on the population of pensioners. This is a group with an average IQ above that for the population as a whole. One might have hoped (and did hope) that having run the gauntlet of the taxation system up to retirement age, one might be left alone with whatever resources one had managed to conserve. But no, it will not do. An additional direct tax on the working elderly is being proposed (misleadingly labelled ‘national insurance’).

At present, there is a reduced rate of tax on the earnings of those of pensionable age, which one might have considered reasonable as recognition of their having reached an age at which they are likely to be needing to pay more for age-related facilities, such as cleaners and takeaway meals, while the hours which they could work might be limited. Now it is argued they should be taxed more, ostensibly in order to finance a tax cut for younger workers.

Older workers who choose to stay in their jobs beyond 65 should pay national insurance to support young workers, a group of Tory MPs has said. Up to £2 billion a year could be raised by imposing National Insurance on the income of Babyboomers who are still in work. The money would be used to give young, low paid workers a National Insurance ‘holiday’ to allow them to get ahead.

The recommendation is on the back of studies showing that this generation of young workers is likely to end up worse off than their parents. At the moment, older workers are not required to pay National Insurance - although their bosses have to pay 13.8 per cent - because the money is perceived as being for pensions and benefits.

The money would also be used to scrap the National Insurance payments for those who employed young workers. This would be worth an extra £375 for an 18 year old working 40 hours a week on the minimum wage rate of £4.98 - and would save their boss £450 per year. For a 21 year old, it could be £675 a year, saving the employer £800. (Daily Mail, 9th July 2012)

Over-65s are a selected population, even if selected only by managing to survive to that age. The proposed tax involves resources being transferred to a younger population, selected only by being ‘low-paid’. This fulfils the familiar acceptability criterion applied to a potential tax used to finance benefits, that resources should be moved from a population with a higher average IQ to one with a lower average IQ.

There are other potential rationalisations waiting in the wings as reasons for taxing the working elderly. For example, it is being argued that all local councils should have the same criteria for assessing ‘need’ for the sorts of ‘help’ they provide. So overall, councils will no doubt have to pay out more than they do at present, and where will that come from? From taxpayers, which includes the population of those who do not seek, or do not qualify for, ‘help’ from councils. Thus, in effect, resources are to be transferred from the more independent pensioners to those who fall into the clutches of the Oppressive State, voluntarily or involuntarily.

It seems very likely that the population of pensioners who keep themselves independent, by working or otherwise, has a higher average IQ than the population which fails to do so. So transferring resources from the former population to the latter also fulfils the standard acceptability criterion (see above).

* For more on how pensioners are being increasingly regarded as milch cows, see here and here.