Tax and spend

I asked Bing this afternoon how much a penny on the basic rate of income tax would raise, and it turned up reference 1 in very short order, an extract from which is snapped above. What appears to be a reasonably authoritative answer, culled from the 2021 workings of the House of Commons Treasury Select Committee: one penny on the basic rate of income tax would raise around £5b.

From other sources, I learn that of the 600,000 or so nurses working in the UK, around half are working for the NHS. It would be interesting to probe, but we stick with the lower figure for present purposes. So the cost of bunging every nurse £5,000 a year, with the total to be shared out by some tricky formula to be devised by the civil servants of the Department of Health & Social Care, would be of the order of £1.5b. Maybe make that up to £5b by including all the care workers, most of whom are in the private sector, but with a lot of them, in effect, paid for by local authorities.

So if we assume that there is nothing more to be cut without causing serious pain, a question to put to the voters could be: would you accept a penny on your income tax to do something of this sort? Would you accept a smaller slice of the cake in order than nurses and care workers can have a bigger slice?

Maybe we could ask YouGov (the lot invented by Mr. Zahawi) to come up with some suitable questions and put them to one of their panels?

Sadly, things are not this simple. No doubt those of a lefty persuasion, would say leave basic rate tax alone. Much better to have a pop at the higher rate or do something about unearned income, also known as income from investments and capital gains. Or even a one-off tax on wealth, rather in the way of the tenths and fifteenths which went to pay for the wars of our medieval kings.

Sadly also, government by single issue referendums does not seem to be a viable way forward. All their faults notwithstanding, delegation to politicians and civil servants does seem to work better.

References

Reference 1: https://publications.parliament.uk/pa/cm5801/cmselect/cmtreasy/664/66408.htm.