13 July 2011

An amazing sleight of hand

Andrew Dilnot will propose a cap of between £35,000 and £50,000 on the amount people have to pay towards their care in their last years – with the taxpayer picking up the balance. His proposals would leave the Treasury with an estimated bill of more than £2bn – which would have to come from taxation or cuts elsewhere in Whitehall. (Independent, 4 July 2011)

By an amazing sleight of hand, the Dilnot proposals to tax other pensioners more, in order to ‘cap’ the amount which has to be paid by those who go into care homes, are represented as compassionate towards the middle class, and towards the ideas of thrift and inheritance.

‘Life is littered with potential financial catastrophes, from costly-to-treat illnesses to house fires, but in most cases the risks are pooled, whether through the state or the insurance market,’ said The Guardian. When it comes to care, those with more than £23,250 are on their own facing potentially unlimited liabilities. The results are ‘dire’. So Dilnot’s plan is very welcome, as a way of ‘staving off ruin for an unlucky minority’...

It’s easy to see the Dilnot report as a ‘caring and sharing’ left-wing proposal, said Daniel Finkelstein in The Times: a ‘market failure is being corrected’ by a new social insurance scheme (and a new tax). But I think this is wrong. It is not, in fact, about looking after vulnerable people. ‘It's about insuring the inheritance of their children: the state will protect the assets of quite wealthy people from the possibility that they will be used up to pay for their care’, and thus not be available for their relatives to inherit. (From article ‘The cost of growing old’, The Week, 9 July 2011)

Now we know that nobody cares about unlucky minorities, especially those with higher-than-average IQs, and we know also that inheritance is almost as deplorable an idea as heredity.

The several billions a year which the Dilnot scheme would cost the taxpayer (we may assume with some confidence that £3.6bn is a conservative estimate) could be covered, he suggested, by a ‘specific tax increase’ on pensioners.

Whether or not these billions, which would be necessary to cap the care home costs of an ‘unlucky minority’, would be confiscated from other pensioners or from some other part of the taxable population, it should be pointed out that, instead of capping care home fees, the billions might be applied to reversing the means-testing of pensions and raising them to a more realistic level. Those who did go into care homes would then have more funds available to pay towards their own care, but not, of course, so much as if they were (as is intended) the sole beneficiaries of the billions.

In the Oppressive State, all sections of the population with above-average IQs are to be destroyed. So one starts by hating capitalists and landowners who would not be in the positions they are if it were not for above-average functionality and realism on the part of themselves and their ancestors.

But if they are torn down you still have some people of above-average functionality in the population, whose ability and conscientiousness have not yet got them into favourable positions. Before the advent of the Oppressive State in 1945 it was probable that a person who reached the age of sixty fell into this category. They were likely to have a good genetically determined physical constitution and to have avoided the hazards of life which might have led to their death at an earlier age. So they were likely to be realistic, conscientious, forethoughtful and independent-minded. That is, they were likely to be the sort of people that the Oppressive State seeks to destroy.

So you would think it would seem quite a good idea to believers in the modern ideology that pensioners should have their assets reduced to zero, so that there is nothing for their children to inherit.

But if the population of pensioners is split into those who run up significant costs in ‘care’ versus those who do not, and it now appears that the former population is likely to have a lower average IQ than the latter, there is in fact a motive for penalising the latter to reduce costs on the former.

Otherwise one cannot see why believers in the modern ideology should see anything against the idea of the assets of a pensioner being reduced to zero. Ah, but if there is a population with an even higher average IQ that can be penalised to prevent this – then it is an opportunity for a further tax.

We may suppose that now university graduates are so heavily penalised (unless they have a good probabilistic claim to a relatively low IQ), the pensioners are the only remaining population with an above-average IQ which can be squeezed still further. But why is this necessary? Pensions have been withered on the vine for decades and cut by means-testing, so why now propose an extra tax on them to reduce the charges on those who go into care homes?

A possible explanation arises from the fact that the population of pensioners has now become sufficiently differentiated in IQ for a transfer of resources from one section of this population to another to fulfil the criterion that all ‘benefits’ should constitute a transfer of assets from a population with a higher average IQ to a population with a lower one.