Let's give everyone a £100,000 tax-free start to life
PUBLISHED: 06:58 14 May 2018
Why not give everyone a great start in life by giving them a tax-free bonus?, says Sharon Griffiths.
£10,000 for every 25 year old? What a daft idea. I have a much better plan…
Let everyone earn £100,000 when they start their working lives before they have to pay tax or national insurance. Let them keep all the money they earn to launch them on the world. Much more fun.
The £10,000 idea is the brainchild of the Intergenerational Commission. And no, the 25 year olds can’t use it to fund a series of mega-binges or even a holiday or two. No fun at all. The commission says the money must be spent to fund training, start a business or as a deposit on a house.
Nice thought – but not many 25 year olds want to start a business and even a £10,000 house deposit wouldn’t be much good unless you already had a good job or generous parents or lived somewhere very cheap.
Coincidentally, my sons came into £10,000 in their late teens and early twenties. One used some of it to go to Norway – via China, Mongolia, Moscow and Finland – while the other went off round Europe with his girlfriend in a car tied together with duct tape and string.
They were great adventures before they settled down and tried to be sensible. The commission wouldn’t approve.
What makes the Commission’s plan so hopeless is that making it a universal benefit means it’s chicken feed for some and not enough for others. One size never fits all. Even worse, they want to fund it by making pensioners still working pay National Insurance.
Don’t let’s even start on that argument…
My idea is so simple. Giving everyone a £100,000 tax-free allowance when they start their working life, at whatever age – no national insurance either – is much less restrictive and certainly fairer.
Until they’d earned that much, their money would be all their own, to spend, save or squander as they wished. Spending it would boost the economy, saving it would help their house-buying plans. Win-win.
Keeping more of their wages would make working much more worthwhile and help ease that transition into adulthood. Young football stars would get about a week’s indulgence while someone on the minimum wage would have years before they paid tax.
For the average sort of graduate earning £20,000 or so it would give them a few years to get themselves established and launched into the world.
True, it doesn’t help those with no job – but it’s certainly more of an incentive to look for one.
Simple, isn’t it? I commend it to the government.
But not with much hope.