If the living wage is truly meant to be a living wage, why is it taxed? Let me explain.

The current UK personal tax allowance on income earned from work is £12,570. Assuming someone works 40 hours a week at the hourly living wage rate of £12.21, they would earn £25,396.80 a year. After deducting the personal allowance, the remaining income is subject to income tax, resulting in an annual cost of £2,565.

Additionally, the current system places significant stress on businesses, particularly small businesses. Higher wage minimums increase labour costs (as well as the tax yield for the government), which can lead to higher prices for consumers, reduced hiring, or even job outsourcing. This can stifle business growth and innovation, ultimately impacting the broader economy.

For a more equitable and productive society, we must shift away from taxing earned income and instead focus on taxing unearned income from land and wealth, while also minimising the effects of an ever-expanding government.