Tax Credits and Parallel Currencies

radical economic thought

When the Labour party in Britain was last in power, one of its aims was to reduce child poverty. The instrument it chose was tax credits, mainly going to families with children. (Well, they are called tax credits, but even if your income is too low to pay taxes, recipients get the money in transfers from the government, in which case tax credits should really be called a negative income tax.)

This had all kinds of good effects on the economy. It provided a decent minimum income for families, allowed workers to take on work at the minimum wage, knowing they would get supplemented, and it was a very good tool to fight inequality.

No wonder the current Conservative administration is against it, then. Chancellor Osborne believes it is too costly, has recently cut back on the level paid out, and wants to increase the minimum hourly wage over…

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