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Monday, September 21, 2020
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Home News Alex Wild: Tax-free childcare or childcare benefit?

Alex Wild: Tax-free childcare or childcare benefit?

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The Government has repeatedly (and correctly) brought up the disingenuous labelling of some of their benefits reforms.

What has become popularly known as the “Bedroom Tax” is clearly not a tax, but a reduction in benefits for some people living in social housing deemed to be too big for their needs.

The name has stuck and it’s too late for the Government to get it out of people’s heads. Least of all with a technical, clunky official name like “spare room subsidy”.

Bedroom Tax was clever politics. It plays up to people’s dislike of taxes, particularly those paid by the less well-off. Tax has become a dirty word in overtaxed Britain.

But the Government’s new “tax-free childcare” scheme that will launch in 2015 is just as lacking in candour as Labour’s “Bedroom Tax.”

Essentially, the government (courtesy of taxpayers) will top-up whatever eligible parents pay into an online account to the tune of 20 per cent

So it’s not “tax-free childcare.” It’s just another cash benefit to add the myriad already in existence.

This is typical of the “fiscal churn” that today’s politicians seem to revel in. They take with one hand, only to give away with the other. This only serves the interests of politicians who boast about giveaways and the bureaucrats who administer the hideously complex systems that are created.

This isn’t to say that politicians shouldn’t help families with the exorbitant cost of childcare. Just that they should be honest about what they are proposing: taxpayer funded childcare.

 

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Alex Wild
Alex Wild is a Policy Analyst at the TaxPayers' Alliance

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