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17-03-09(14:48:48)

“Abolish National Insurance Payments”

2. How does it fit with Compass’ core beliefs of equality, solidarity, democracy, freedom, sustainability and well being?

National Insurance is in effect a regressive addition to income tax, which impacts most heavily on the lowest paid, adding to the poverty trap and increasing the equality gap between the haves and the have-nots.

3. How does it build the institutions of social democracy, like social groups and collective and cooperative forms of ownership and control?

Too many of the less-advantaged have no interest in our society and have given up on democracy and social institutions. We need to re-engage the poorest in democratic process, as they stand to gain most from it.

4. How much will it cost or raise and where will any cost come from?

The cost needs to be absorbed by the income tax system. For the majority of tax-payers, there would be no effective change in that the amount they currently pay in national insurance would be re-designated as income tax. For the highest payers there would be a proportionately small increase in tax. For the lowest tax payers - and those who currently pay no income tax - the change would be very significant.

5. Which groups in the electorate are likely to support or oppose this measure? Is there any polling evidence you have on this?

Support depends on how policies are portrayed - I have no evidence that the lowest-paid people could be persuaded to vote by a policy which would remove their requirement to pay, but if this didn’t persuade them then I suspect nothing would.

6. Is there a place or country where it’s worked? Please provide some information.

Is there a place or Country which has the same illogical system of “national insurance” payments as the UK?

7. What are the three main arguments in favour/against it?

1) It is wrong to tax people who cannot afford to pay
2) It is wrong to tax people on low incomes disproportionately more than people on higher incomes
3) It is wrong to allow people on very high incomes to pay no additional tax (ie “national insurance”) on a slice of their income above a certain level.

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