FREE TV licences for over-75s – what’s the problem? What’s the answer? What does the tax pay for? It actually doesn’t pay for anything. That is propaganda designed to hide the true nature of money, of currency.
The TV licence fee is a “hypothecated tax”. A hypothecated tax is one which is designed to reflect the cost of a particular service or infrastructure. The tax itself does not pay for the service, or in fact anything at all. It is impossible in our monetary system for central government taxes to pay for anything.
Taxes levied by central government do not fund government spending. The idea that there is a limited amount of money in the country and that government has to extract it from the populace before they can spend it is a myth. It actually works the other way round.
Every year we fill in a tax return, and the government collects tax revenue. Return = “come back”; “revenue”, from the French “revenir”, meaning “to return”. There’s a clue. Taxes are money that the government has spent on things being returned to the government. It is impossible to pay taxes until the government has created and spent the money into existence.
How can that be? Well, government creates money when it spends. That money pays for stuff like roads, railways, schools, healthcare, police, defence, welfare, infrastructure and services. Then the government taxes some of it back. What is left in circulation is people’s savings – their nest eggs, pension funds etc.
By standard accounting practice there has to a be a debit for every credit – money as a credit asset can’t just exist in an accounting vacuum. If someone has a net credit asset, someone somewhere else must have a matching debit liability.
When people have net financial assets, where is the net financial liability?
That’s the government. The only entity that can sustain a net financial liability is a currency-issuing government. That’s because it is the currency ISSUER, not like you and me, who are currency USERS. When they issue the currency by spending it, they generate a deficit on their books, which creates a surplus on the books of the currency users. That is the way it has to be; it cannot work any other way. Any attempt to reduce the deficit will only result in removal of currency from people’s pockets, removal of their disposable income, reducing their savings, putting businesses out of business, making people poorer and homeless.
The currency issuer can spend as much currency as they like, because they create it as they spend. They can’t run out of it or go bust. Never, ever. They don’t have to “balance the budget”, it’s neither feasible nor desirable. That idea (that the government has to balance the books) is meaningless drivel of the first order. The proposal to make over-75s pay for a TV licence because it is needed to fund the BBC is a downright lie.
The TV licence fee pays for nothing. When it is received by the government it just reduces the amount of deficit that was created when the money was first spent into existence. It is impossible for taxes to pay for anything.
It is never a question of limited funds, it is only a question of limited resources. If the country can withstand government spending without causing inflation then there is no problem. Removing more money from the economy by taxing people on the worst state pension in advanced Western economies is utter criminally malicious stupidity.
Malcolm Reavell
Aberdeen
WHEN you think that Gary Lineker is being paid £1.75 million and women are sent to prison for not paying the TV licence it would make you sick. The fact that they have to send letters threatening non-payers costing £6m is ridiculous.
The only party to come out and say they would abolish it was Ukip, maybe because they knew they wouldn’t be elected. They talk about democracy – if we have it, give us a vote on the TV licence?
John Connor
Dunfermline
SIR David Clementine claimed that denying over-75s free licences was the leading option. In the consultation 48% voted to continue the concessions, 37% voted to reform them and only 15% voted to scrap them. Claiming 15% as a majority is, well ... good old auntie Beeb.
Tony Hall says that denying free licences protects those most in need. Tony Hall won’t know much about being in need. At £465,000 from the BBC alone, he trousers more in an hour than a pensioner gets for a week. As Lord Hall he sits in the House of Lords but states that he “will not vote in any division and is unlikely to speak in any debate” Fat lot of good he is then.
I am surprised at the one who always dips under the radar. Steve Morrison gets £43,000 a year for representing Scotland’s interest on the BBC board. Another waste of space.
Of course the real villains of the piece are, once again, the Tories. It was John Whittingdale as Culture Secretary who took away the funding for over-75s in the 2015 BBC Charter revision. He claimed £172,404.62 in expenses last year on top of his £79,468 salary. A 75-year-old gets £125 a week.
Ian Richmond
Canada (temporarily)
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