[wdmmg-discuss] child benefits for higher tax-payers

[Theodore Hong]

Julian Todd <julian at goatchurch.org.uk> wrote:
> It's a shame we don't have a graphic showing the distribution of
> payouts to the different household earning brackets lined up against
> the total income tax take on each of these households.

I recently came across just such a graphic:

The Distributional Impact of Public Spending in the UK
(see Figure 1 on page 13)
http://www.2020publicservicestrust.org/publications/

Note however that this only considers cash payments.  Which brackets
benefit from the rest of government spending is a much more
complicated question.

> I have got into frequent arguments with my grandfather who always
> thinks it's unfair for high rate earners to be able to claim this
> benefit, which they then spend on shopping.
>
> He should perfectly well know that the benefit effectively clawed back
> through their higher tax rates.

It depends on what you think the fair rates of tax should be.  If you
think a fair rate for high earners is 40%, but actually after benefits
they end up paying 39% net, you might think they should pay more.  If
you're happy with the high rate being 39% then I agree with you.
(Obviously these numbers aren't accurate, but you get the principle.)

theo