20-20 vision is in need of a review

Monday 9th February 2009, 2:59PM GMT.

From Paul St John Turner.
THERE have for some time been strong feelings that the 20% means 20% taxation affects Middle Jersey unfairly, especially with its starting point on incomes as low as £30,000 or so for some taxpayers, and its additional effect on many struggling with high mortgage payments.

The current economic situation seems to be a case for maintaining a review of this, along with considering other steps. It calls for measures, as seem to be in hand, for helping sound businesses otherwise facing financing problems, bringing forward public works where sensible and, as always, ensuring that those on the lowest incomes remain protected.

However, as we can see from the examples of the UK, which has reduced VAT across the board, and the USA, which is putting together measures clearly aimed at boosting Middle America, there is also a need to try to offset the decline in consumer spending. This is to maintain the demand our businesses so badly need for their products and services, and thus help maintain employment, too.

Certainly Middle Jersey should be considered a valid target for any fiscal relaxation at this time. It is true that as an income tax measure, suspending (or, better, redesigning so as to mitigate the effect on middle earners more permanently) 20% means 20% may not be seen as providing an immediate economic stimulus.

But many of us plan our spending on the basis of our expected financial position ahead into the near future, so knowing there is less tax to pay next year could help now. At the same time, of course, the cash-flow cost to the States coffers of an income tax relaxation would be a little into the future too, by which time we should hopefully have the benefits of measures put in hand now.

It was encouraging, before last autumn’s elections, to hear politicians and election candidates focus on the issue of 20% means 20%, given its progressive effect on middle earners now that this taxation is phasing in. The case for doing so now still seems as strong as ever.
Cades Peak,
Old St John’s Road,
St Helier.

1
Anonymous St. Helier

February 10, 2009 at 12:13 pm

Since when.. pray tell.. is £30,000 ‘middle’ jersey?! the vast majority of the island are paid less than 20 and these richie rich folk are complaining!? I pay 18% as standard and earn 18,000 I think people complaining about a severely lesser situation need a reality check and a pair of scissors to their credit cards (note the plural on cards)

A new average wage needs to be worked out on the mode as opposed to the median… eg. 60% of people get £1200pcm wage whiles 1% get £50,000pa.. this does not put the average in the mid 30ks!

This is also affecting the prices of qualified accomodation rentals.. landlords are becoming pirates unwittingly as they work oout their rices based on local knowledge of things like average wage etc. I recently viewed a flat for the same rent as the one I currently live in where the entire unit was the size of my old bedroom when I lived with my parents

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2
Al

February 10, 2009 at 3:59 pm

I am pretty sure the last states figures had average salary in both the public and private sectors at £39k as the fact they were almost the same surprised me. What I would like to know is what the “mode” average is (i.e. the most commonly paid salary in each sector rather than the simple average). Clearly there are a sizeable number of people in the private sector earning six figure salaries, probably some earning millions, which will pull up the average in that sector. I suspect you would find that the mode average salary working for the states is significantly higher than in the private sector. Combine that with a final salary pensions scheme that will pay significantly more than that the worker in the private sector is likely to be able to save and the choice seems pretty easy to make. More money + much better pension + much better job security.

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