You've clearly not researched just how much Employer's NI is. It's a lot more than an employee pays.
It's clearly not a subsidy if a company is paying their fair share in taxes. Also here in the UK we have workers on income support (welfare) because their employers underpay them... That is quite literally a case of the public purse subsidising a private enterprise.
While I'm not familiar with how Employer's NI works else where in the world, given the way it works in the US I'm fine with it being cut. The way it works in the US is great for hiding the true rate of tax from the employee by having it taken out of their paycheck before the employee ever sees it. I think it works better if the employee sees the full amount their employer pays them and exactly how much the government taxes that rate.
To qualify for income support a person has to be working less than 16 hours per week.
You also have to be one of these:
> pregnant or a carer or a lone parent with a child under 5 or, in some cases, unable to work because you’re sick or disabled
(There are 3 other requirements too)
The UK benefits system is comprehensive and complex, and there are some people in full time work who get benefits. This is a good thing - we want people to work. We want people to have at least a minimum wage. We don't want to set the minimum wage too high because it reduces jobs.
Some benefits are specifically "in work" benefits - working tax credit and child tax credit.
If it works anything like the US, there is a portion[1] assessed to the employer and to the employee. If you report income as an independent contractor/self-employment, you pay both sides of it (since otherwise people would artificially class themselves as contractors to pay less). Are you saying Uber drivers in the UK aren't paying that, or that UK law allows that loophole?
>Also here in the UK we have workers on income support (welfare) because their employers underpay them... That is quite literally a case of the public purse subsidising a private enterprise.
So, it's not Uber-specific, just the general argument that all low-wage labor (below some threshold) is inherently subsidized because you qualify for public assistance at that level.
[1] economically pointlessly, I might add
That is exactly what they do do. IT, media, even public sector, it is rampant. The Inland Revenue keep trying to crack down on it but contractors are very sly about it and always find a loophole to technically meet the requirement as if they were a genuine small business.
If you report income as an independent contractor/self-employment,
you pay both sides of it (since otherwise people would artificially
class themselves as contractors to pay less).
In general, that's true in the UK, but because of the various allowances, categories, and thresholds, if Uber is a contracting company, and the drivers are individual freelancers/contractors, less tax is paid.There are complicated rules to ensure this is only allowed in cases of genuine freelancing/self-employment (IR35 is one part of those rules), but Uber has previously lost court cases on parts of those rules, where drivers were ruled to be employees rather than freelancers [1].
In IT consultancy (and other high-paid jobs), it's generally more tax-efficient for the worker to be an independent contractor (but has to satisfy various rules to do so). For lower-paid jobs like driving for Uber (and the general "gig economy"), it's in the companies' interest to label the worker as "self-employed", which means the worker misses out on all sorts of worker protection regulations whilst the employer saves on costs and taxes. Many companies skirt the limit of the regulations, and end up in court as a result.
[1] https://www.theguardian.com/technology/2016/oct/28/uber-uk-t...
1) That your tax rate can be lower under self-employment classification (incentivizing spurious misclassifications).
2) That roads are paid for through income tax (rather than petrol or odometer tax), which is only loosely correlated with road usage and which punishes people who economize on it, while subsidizing above average users.
In any case, you can't really pin 2) on Uber, which isn't getting any more of a subsidy than any other business using the "road platform". They were abusing the law for 1) but courts have since put a stop to it.
Furthermore, the point under debate was whether Uber, as a cab[-like] service is underpaying for its road usage -- relative to the typical person -- by driving so much more; that point is still wrong because their per mile costs are unchanged with such higher usage.
If talking about the UK, that is not quite correct. Roads in the UK are mainly funded by income tax and council tax. See http://ipayroadtax.com/ for more information.
Everyone pays gas taxes that scale with the amount driven and therefore their use of the roads. Any unusually high driving would be made up by the higher gas consumption and the resultant taxes thereon.
If anything:
1) Taxi routes are concentrated in cities, where they have lower miles per gallon and thus pay more taxes per mile driven than the typical car. (Edit: and city roads probably have lower maintenance costs per ton-mile due to not having to drag people out as far to maintain it and related factors.)
2) Maintenance costs on roads are almost entirely due to cargo trucks, not sedans, since road damage scales with (something like) the fourth power of weight per axle.
Side note: why is it that every time there's an unpopular big player, everyone finds a way to label any publicly provided good as a subsidy to that player? It's not just this but "arresting shoplifters is a subsidy to Walmart", "public roads are a subsidy to Amazon", "public infra is a subsidy to Netflix", "navies are a subsidy to shipping".
> someone else pays for the healthcare of their drivers
No, the government collects income taxes from everyone to provide universal health care through the NHS. Uber's drivers pay the social insurance taxes on their income. The fact that it isn't billed to Uber specifically is irrelevant. Lloyd's isn't billed for the NHS taxes on the couriers that drop them packages, but that doesn't mean Lloyd's "dodges employer's NI".
If your point is that they should be so assessed because they're really employers, not clients, that's economically questionable too -- the burden of a tax is independent of who you assess it to; if one day they forced Uber to pay NI, they could just cut payments to drivers to cover the tax, since all the income streams would be unaffected. Same effect as if they started assessing VAT by charging customers as they leave the store instead of taking it from retailers.
https://en.wikipedia.org/wiki/Tax_incidence