Saturday, 17 September 2011

Another Reason to Move to Belgium

This is a chart based on research done by UNICEF in 2000 measuring relative child poverty as a proportion of population in the OECD countries. The data is a bit old and note that it is a relative measure i.e. of households with children where the income is less than 50% of the national median. So a 'poor' child in America is still a lot better off than a child in many other countries in the world. And a poor child in 2000 is better off than his or her counterpart was in 1959, for example. Nevertheless, one thing it does indicate is that in those countries where economic and social policies are geared towards the redistribution of wealth, there is less child poverty. For example, Sweden, Norway, Finland and Belgium have scores of around 4% or less whereas in America the figure is around 22%. So it would seem that if your aim is to reduce child poverty then you should reduce taxes on the low paid and increase taxes on the high paid. Rather than thinking about doing away with the 50% tax rate, therefore, George Osborne should be increasing it to 60% and increasing the threshold above which tax becomes payable thus taking low paid households out of tax altogether.

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