Figures published in today’s Daily Telegraph reveal that the vast majority of UK tax payers are likely to take far more out of the welfare budget than they ever pay in.
The Government are soon to send out statements showing how much tax people pay towards the social security budget, NHS and other government departments annually. The Telegraph have used these figures to work out how much tax people are likely to pay over a lifetime in what appears to be a crude attempt to use big numbers to undermine support for publicly funded healthcare and the welfare state.
This had led the paper splashing a story across their front pages today claiming: “A person who earns an average salary of £50,000 over a 43-year career will contribute £219,039 to state welfare and pension spending.”
The next sentence however reveals the truth of the situation: “They would have to receive the state pension for 38 years to become a net beneficiary.”
Now this may be optimistic, but it’s not impossible, meaning even some of the highest earners will get all the tax they spent on social security back in their pension. The figures are also deliberately misleading. Few people, even the highest paid, start their career on £50,000 a year, so these earners would have to be on significantly more than that by the time they retire for this to be a career average salary
Far more importantly the figures also show that someone on £25k a year, just under the average wage of £26,500 (but still far more than many people earn), will pay a total of £80,854.19 towards the social security budget in their lifetime.
Pension Credit, the minimum income guaranteed for single pensioners is £145.40. This means that an average earner who lives just ten years after retiring receives every penny they’ve paid into the social security system back in pension payments.
And this is assuming they didn’t have children. A couple of kids means average earners will also receive around £30,000 in Child Benefit.
Whilst everybody’s circumstances are different, so precise calculations are impossible, it is likely that most of those on salaries of up to around £30/35k are a net drain on the social security budget.
And this is before what most people regard as benefits are even taken into account. Any of these tax payers who have ever needed to claim in-work benefits such as tax or child credits, housing benefit or funding for child care will receive far more over their lifetimes. On top of this, should they ever become unemployed, unwell or disabled, they will be be eligible for the increasingly scant support of the benefit system.
Whilst benefits are under attack like never before, the value of this level of social protection is still not insignificant. Even the most basic private income protection insurance, which doesn’t include cover for disability and would only provide a tiny income for a year, is likely to cost around £20,000 over a 43 year career. Job Seekers Allowance, the benefit for those unemployed, is just over 2% of total welfare sending, costing around £1,600 over the lifetime of the average tax payer.
But after they’ve received their pension and any child benefits, the vast majority of tax payers are actually getting this comprehensive social insurance for free!
The reason for this situation is the huge disparity in wealth in the UK. Last year the Daily Telegraph ran a piece whinging that the top 1% of earners pay 30% of the tax. But that’s because they’ve got so much of the money. As recently pointed out by someone else (but I can’t remember who), if they had all the money, they’d pay all the tax and they’d no doubt still be fucking complaining. This is despite the fact that almost all government spending is geared towards helping them become as rich as possible whilst remaining safe from the threat of crime or revolution. The amount they pay in tax is nothing compared to the amount of profit they earn from our work. That is why the rich keep getting richer and we keep getting poorer.
This chasm between the very rich, and the rest of us, means that most people, whatever they may think, are a drain on government spending. So the next time you hear someone complaining about how their taxes pay for people on benefits perhaps you could gently remind them that the chances are they don’t pay a penny towards the benefit bill. In fact it’s quite likely they are one of those benefit scroungers that everyone is always complaining about.
Follow me on twitter @johnnyvoid