Not all benefits are unearned, the whole principle of the National Insurance system is that whilst in work you contribute to a scheme which will provide you with benefits at a time of need.
However we need to look at the principles of social security, from which benefits derive regardless of employment history.
Social security exists to maintain income at a time when through unemployment, illness, disability or age, employment is not possible. It provides huge benefits to society as a whole, including:
- the relief of poverty
- social protection - The idea of 'social security' implies that people ought to be able to feel secure. This involves, not only being protected against poverty, but being protected against the hardships that may arise through a change in circumstances.
- redistribution - Benefits which go to people who have inadequate incomes, at the expense of people who are more, are progressive.
- solidarity - Social security should not be seen simply as charity, but as a form of mutual co-operation. It is a principle which is extended across the welfare state.
This is a nonsensical argument - there is no subsidiarity in the income tax system, individual governments make policy decisions to determine the level of benefit spending. However, because there is an entitlement to benefits (like it or not) when the entitlement is reduced or removed it is not unnatural for recipients to feel as if it has been "stolen".
Perhaps Lord Freud might be accused of that!
However let's look at the rich taking from the poor. I employ several thousand people. I'm very conscious that there is a huge sensitivity in the affect of changing the level of wages the majority earn. Wages account for roughly 20% of my costs, so a 10% wage cut adds 2% to my margins and a 10% pay rise reduces my margins similarly by 2%. The point here is that 2% either way makes no difference to my lifestyle yet a 10% increase or decrease in wages makes a huge difference to the lifestyle of my employees. A 10% reduction would have serious consequences for the majority I would guess. I am very conscious that as an employer I determine the standard of living of my employees and could quite easily "take from the poor" if I wished to do so. I and other employers have almost complete control in this sense.
It's true that the top earners collectively pay more income tax than the bottom earners, but surprise, surprise, that's because they collectively earn more. It's also true that lower earners receive more in state services than they contribute in taxes and higher earners pay for more than they receive. But that's the point of progressive taxation, which almost everyone accepts is a good idea.
What's more important though is to look at the amount of total taxes the poor and the rich pay relative to their income. We need to include indirect taxation here too - VAT, car tax, alcohol taxes etc etc.
So, using ONS figures the poorest 20% pay a total of £4,743 in taxes per person, £1,256 in direct taxes and £3,488 in indirect taxes. The top 20% of earners pay £29,462 on average, £20,322 in direct taxes and £9,140 in indirect taxes.
As a % of income we get the following:
Lowest earners pay on average 55% of their earnings in direct and indirect taxes
Highest earners pay on average 47% of their earnings in direct and indirect taxes
Correct, just not in the direction you believe!