NIC is just a tax in the UK

“ The composition of revenue in the UK is broadly in line with other developed countries. The amounts raised from income tax, VAT, other indirect taxes and corporation tax are all around the average for comparable countries. The UK raises more than most from property taxes, especially business rates. But it raises less than average from social security contributions (SSCs – National Insurance contributions in the UK), and in particular from employers’ SSCs.
This fact needs interpreting with care, however. Many other European countries have a much stronger link between social security contributions and social security benefits than the UK does. This changes the distributional and incentive effects of the social security system and how it is perceived – it has more of the characteristics of a compulsory savings/insurance scheme, not just a tax – and we should be wary of analysing one half of the equation in isolation, looking at increasing NICs to European levels without also considering how state pensions and other benefits are provided.”

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Posted By: Old Git, Nov 28, 17:25:33