The tax and benefit system is basically broken for couples with children

If you wanted to disincentivise work for the poorest, this is how you'd do it.

Last week, this IFS chart showing the effect of the child benefit withdrawal on marginal tax rates made quite an effect:

IFS Chart

I wrote about it myself, arguing that it underemphasised how bad the effect would be on families with lots of children. But the chart also plays down how bad the existing system is. The interplay between benefits, income tax and national insurance results in marginal tax rates which increase and decrease in a haphazard and unpredictable way, and frequently reach astronomic levels.

The IEA's Philip Booth looked at what he calls "the simplest possible case… of a couple with three children not claiming Housing Benefit, Council Tax Benefit or assistance with child-care costs (or a host of other ad hoc benefits that are available)." The figures were compiled in May last year, but are based on the state of affairs this May – so there may be some lags in exact amounts, but the overall picture remains accurate, at least pre-Universal Credit. Here they are charted in the same format as the IFS'

Chart Two

It's clear that for this case, the tax and benefit system is almost entirely backwards. The largest rates are paid at the bottom end of the income scale, progressively declining to 42 per cent, before finally, at the very top end, increasing to a "high" of 47 per cent.

And as Booth says, this is the simplest possible case. For someone in this situation claiming all the benefits they were entitled to, it's highly likely that at least one of the marginal rates would break 100 per cent – and that the tiny patch of 0 per cent at the very poorest end would disappear entirely.

While Bond and I agree on the problem, it's unlikely we would match minds on the solution. To me, the data above illustrates the fundamental folly of thinking that withdrawing benefits can ever really make economic sense. It is, prima facie, a strong argument for a Green-style citizen's income. Remove the conditionality from benefits and you have a system which encourages work at all income levels, rather than stamping on motivation the minute a family is no longer nominally "poor".

Raphaelle and Fabienne pose with one of their three children. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Getty
Show Hide image

Why do the words “soup, swoop, loop de loop” come to mind every time I lift a spoon to my lips?

It’s all thanks to Barry and Anita.

A while ago I was lending a friend the keys to our house. We keep spare keys in a ceramic pot I was given years ago by someone who made it while on an art-school pottery course. “That’s er . . . quite challenging,” the friend said of the pot.

“Is it?” I replied. “I’d stopped noticing how ugly it is.”

“Then it’s a grunty,” she said.

“A what?” I asked.

“A grunty. It’s something you have in your house that’s hideous and useless but you’ve stopped noticing it completely, so it’s effectively invisible.”

I was much taken with this idea and realised that as well as “grunties” there are also “gruntyisms”: things you say or do, though the reason why you say or do them has long since been forgotten. For example, every time we drink soup my wife and I say the same thing, uttered in a strange monotone: we say, “Soup, swoop, loop de loop.” How we came to say “soup, swoop, loop de loop” came about like this.

For a married couple, the years between your mid-thirties and your late forties might be seen as the decade of the bad dinner party. You’re no longer looking for a partner, so the hormonal urge to visit crowded bars has receded, but you are still full of energy so you don’t want to stay in at night, either. Instead, you go to dinner parties attended by other couples you don’t necessarily like that much.

One such couple were called Barry and Anita. Every time we ate at their house Barry would make soup, and when serving it he would invariably say, “There we are: soup, swoop, loop de loop.” After the dinner party, as soon as we were in the minicab going home, me and Linda would start drunkenly talking about what an arse Barry was, saying to each other, in a high-pitched, mocking imitation of his voice: “Please do have some more of this delicious soup, swoop, loop de loop.” Then we’d collapse against each other laughing, convincing the Algerian or Bengali taxi driver once again of the impenetrability and corruption of Western society.

Pretty soon whenever we had soup at home, Linda and I would say to each other, “Soup, swoop, loop de loop,” at first still ridiculing Barry, but eventually we forgot why we were saying it and it became part of the private language every couple develop, employed long after we’d gratefully ceased having soupy dinners with Barry and Anita.

In the early Nineties we had an exchange student staying with us for a year, a Maori girl from the Cook Islands in the southern Pacific. When she returned home she took the expression “soup, swoop, loop de loop” with her and spread it among her extended family, until finally the phrase appeared in an anthropological dissertation: “ ‘Soup swoop, loop de loop.’ Shamanistic Incantations in Rarotongan Food Preparation Rituals” – University of Topeka, 2001. 

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt