Super Tuesday: 5 things we learned

Here's where the GOP stand after another ten states choose their Republican candidate.

Earlier this week, the former First Lady Barbara Bush called the 2012 Republican race "the worst campaign I've ever seen in my life". Today's New York Times leading article agrees, noting that even with last night's Super Tuesday results counted, the dirty race continues to drag on:

Republican voters will have to go on for some time choosing between a candidate, Mitt Romney, who stands for nothing except country-club capitalism, and a candidate, Rick Santorum, so blinkered by his ideology that it's hard to imagine him considering any alternative ideas or listening to any dissenting voice.

So where does this long drawn-out process for the GOP to nominate a presidential candidate for November stand? Here's five things to take from last night and note in the coming weeks:

1) Mitt continues to struggle in the South

The frontrunner Romney lost South Carolina to Gingrich in January, and yesterday Newt took his home state of Georgia, while Santorum won Tennessee. Romney has a sizeable lead in the delegate count, but has not yet won over southern voters. It's not enough that these conservative Americans backed John McCain in 2008: Romney needs to make gains off his own personality and politics.

2) Evangelical votes could yet boost Rick

Santorum's success with conservative evangelical voters could help him make up some ground over the next week. Three of the four states holding primaries or caucuses in the coming week -- Kansas, Alabama and Mississippi -- hold 130 delegate votes between them and are of this demographic. It's now almost a certainty there won't be a Republican nominee until June.

3) Ron Paul keeps things interesting

Despite having yet to win a contest, Ron Paul continues to receive enough votes to keep things interesting. He finished in second place -- ahead of Romney -- in North Dakota, second in Vermont and in half the contests received more votes than Newt Gingrich. Should Paul leave the race soon, his not-insignificant fan base will be migrating towards another candidate, which could play out in various ways.

4) Was Ohio Mitt's coup?

This swing-state come November was an absolutely critical win for Romney. Had Santorum taken that state, he would have received an enormous momentum boost. Yet Romney's success comes with warnings: exit polls show he continues to struggle with working-class voters, evangelicals and those described as "very conservative". And with the Romney campaign spending four times that of Santorum's, a 15,000 vote margin is only barely good enough.

(As an aside, four years ago Hillary Clinton won the Ohio primary, only to go on to lose the nomination to Barack Obama who took the state in the Presidential election.)

5) GOP flailings are great for the President

Unsurprisingly (see Bush, above), the GOP race is doing little to soften the party around the edges. As I reported yesterday, the reduced turnout of voters in the primaries shows a clear gap of enthusiasm for the Republican party amongst their own people. Now new polling by Pew shows that the dirty battle between candidates is directly helping their rivals: Democrats, turned off by Romney &co. and rallying behind the president. As the New York Times writes:

A new Pew Research poll shows that 3 in 10 voters say their opinion of the Republicans has worsened during the primaries. Among Democrats, 49 percent said watching the primaries have made them more likely to vote for Mr. Obama. That is up from 36 percent in December, which shows that Mr. Obama has risen as the Republicans have fallen.

Still, it's eight months until the big election day, and the NYT leader notes, "the president, who can be frustratingly inert at times, still has a long way to go".

Alice Gribbin is a Teaching-Writing Fellow at the Iowa Writers' Workshop. She was formerly the editorial assistant at the New Statesman.

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.