Web links for 29th June 2012
A summary of new research by the IMF shows income inequality has increased in most rich countries in recent years.
Taxes and transfers "have played a significant role in offsetting the increase in inequality." Over the last two decades fiscal policy has reduced inequality by about a third in OECD countries – but the impact has weakened since the mid-1990s.
"We find that the reduction in the generosity of social benefits (particularly unemployment and social assistance benefits) and lower income tax rates, especially at higher income levels, have contributed most to the reduced impact of fiscal policy since 1990s."
This makes the likely impact of austerity worrying, but "fiscal policy can be used to mitigate the adverse impacts of consolidation by allowing automatic stabilizers (such as unemployment benefits) to work, protecting the most progressive social benefits, removing opportunities for tax avoidance and evasion, and increasing reliance on wealth and property taxes."
Ben Baumberg relays a new Spartacus report, showing that as many as 1 in 10 of all new car sales in the UK are paid for using the Motability scheme, which will be hit hard by the replacement of Disability Living Allowance by the new Personal Independence Payment.
This is likely to mean 30,000 fewer car purchases a year – equating to about 1,000 jobs in the industry.
At the same time, a survey found that 29% of recipients said that Motability had helped them keep a job, and 9% that it had helped them get one. If the sample is representative of all Motability users, the scheme keeps 68,000 people in work.
"Spartacus estimate that cutting disability benefits will save the Government £640m but reduce GDP by £660m, as well as reducing quality of life for disabled people and the people that help care for them. "