By Anne Southern
I FIND it’s never a good look when the well-heeled complain about taxes. I don’t know how the complaint about paying taxes on social security pensions has suddenly arisen. This is a situation that has been the case since their inception, but it has been surrounded by a lot of misinformation. It is a fact that if this pension represents your whole income, you don’t pay tax – nor are you taxed on the whole lot the minute you have a bit more. In fact, the threshold before you pay tax is around £6,000 more than the pension. And when you exceed this amount, you only pay 26p for every pound you earn over the threshold, until paying 20p on the whole lot would be less.
“20 means 20” only applies to relatively high incomes. Up until this threshold where you are eligible for tax, you can claim some “pension plus” benefits. These help with the cost of dental, optical and chiropody services. They are lost the moment you hit the threshold. Perhaps there is a case for tapering this, so they are not all lost at once.
People argue that paying tax on the pension represents double taxation, as the payments are made out of income that has been taxed, but this is to ignore the fact that social security payments are not a tax, but a contribution to an insurance scheme, and, if you are employed, the employer pays at least half of this contribution. Also, payments are capped, so high earners pay a lower proportion of their income than lower earners. I maintain that if the social security pension forms part of a larger income, and if this income is deemed to be high enough for you to be taxed on it, you should pay up without complaint.
If, like me, you are in this situation then you are fortunate and should consider the plight of young families struggling with high rents, childcare costs and the difficulties of getting on the housing ladder. With our free bus passes, concessions on theatre tickets and probably home ownership, we are the privileged generation.
In the UK, the extremely privileged who can afford to send their children to private schools are complaining about the fact that the new government may ask them to pay 20% VAT on the school fees in order to spend more on the state schools in the form of more teachers and breakfast clubs.
In the UK, only about 7% of children are privately educated. Very few of the parents come from the struggling middle classes and should be able to mop up the extra costs. But I heard a parent on the radio praising the benefits of a private education: smaller classes, excellent pastoral care and good facilities for sports, music and theatre as well as high academic standards. Isn’t this, I thought, something that should be available to all children, especially the underprivileged who don’t have parents who can pay for out-of-school violin lessons, drama and sports clubs and other opportunities?
It would seem that paying tax on luxuries, including private education, should be a given. Cue howls of outrage from those in ӣƵ, who do not pay the 5% GST on school fees. In ӣƵ 40% of children are privately educated, as the highly subsidised States fee paying schools have much lower fees than private schools in the UK.
We are told of the plight of hard-working families making sacrifices to send their children to these schools, and how, if fees were raised there would be a flood of children into the states schools, thus overwhelming them. This is unlikely and, in any case, schools have capacity. Why don’t we ask why it is necessary to send children to fee-paying schools? Should not all children have the same opportunities?
I see the Education Minister is to ask questions about our very divisive education system. As a former Hautlieu teacher, I have always been a great supporter of the 14-plus system, as it gives the same opportunities for an academic education as the colleges. I recognise that it is highly divisive, and that it was always unreasonable for the 11-16 schools, creamed firstly by the colleges, and then by Hautlieu to get comparable results as UK comprehensive schools. Any perceived inadequacies in the non-fee paying schools need to be – and are being – addressed for the benefit of all our children.
It would make sense to have an excellent fully comprehensive system with an all-Island sixth form college. Money saved from not subsidising the colleges and economies of scale could enable us to have a world-beating system. But I fear it’s pie in the sky to expect the colleges, as well as Beaulieu and De la Salle, with their powerful networks of former pupils, to give up their sixth forms, much less to become fully private. Privilege still rules in ӣƵ.
