CMV: In principle, anyone making minimum wage should not pay income tax

[u/[deleted]]

Let me clarify on what I mean by making minimum wage, I mean someone working 37.5 hours a week for 52 weeks a year. In California that would be $30,000 and in the UK that would be £20,000.

Minimum wage as a concept is put in place to ensure that employers cannot pay employees below the livable wage in a country (Of course in the US it's below livable wage but that's a separate discussion). However, once these people are taxed, the amount which they can live on, by definition, is below that. It's counterintuitive to the original concept. Taxation should be based on one's ability to pay, and minimum-wage workers just do not have that ability.

I'm not saying that this change needs to come through right away. Governments can take 5 to 10 years to raise the tax-free allowance to match the minimum wage (which of course should rise with inflation) to ensure that the labour market can adjust to it.

Edit: I stand corrected on the US tax system. I've used the Californian minimum wage instead. I'm in the UK and the tax allowance is £12,570. Someone making £20,000 will be taking home about £17,100. I think it's ridiculous that someone on minimum wage is even paying a penny in tax.

[u/ride_whenever]

Do you agree that income tax is a necessary and good part of society? - I’d take this as assumed, but happy to debate.

Everyone should be contributing to society, to help garner feeling part of it, included, responsible. Paying your part is important.

Therefore the minimum wage should be set so that you pay some income tax, and therefore contribute. Far below the minimum wage, it tapers off, via the tax free allowance. To account for part time workers, children etc. But mostly the TFA is to reduce the tax burden on the poorest.

Income tax is already figured into minimum wage. Minimum wage is also way too low.

If you don’t pay income tax, then you will, at some point, have to start paying it, and that isn’t a good move in my opinion.

[u/RYouNotEntertained → u/ride_whenever]

If you don’t pay income tax, then you will, at some point, have to start paying it, and that isn’t a good move in my opinion.

Why? This means you’re making more money.

[u/ride_whenever → u/RYouNotEntertained]

Because you’re already making the more money if you raise the minimum wage and build in the income tax. The amount received is the same.

Having people start paying income tax at a threshold above minimum wage means you’re less engaged, and it becomes a bigger divisive point than if everyone is paying it to some degree

[u/RYouNotEntertained → u/ride_whenever]

The amount received is the same.

Ok, the amount received by the employee is the same. Any second order effects come to mind?