The least well off households pay 36.6 per cent of their income in tax compared to 35.5 per cent paid by the wealthiest.
Boris Johnson has a piece in today’s Telegraph in which he claims that we should be ‘humbly thanking the super-rich, not bashing them’.
“the latest data suggest that we should be offering them humble and hearty thanks. It is through their ]the rich’s] relentless concupiscent energy and sheer wealth-creating dynamism that we pay for an ever-growing proportion of public services.”
In other words, the rich are heroes and should be treated as such because they pay a vast amount of tax. The top 0.1 per cent pay an “amazing 14.1 per cent of all taxes”, according to Boris.
The rich do pay a high percentage of the treasury’s total tax share. The problem with Boris’ logic, however, is that it ignores one important fact: the poor pay a higher tax rate than the rich.
According to recent analysis by the Office for National Statistics, the least well off households pay 36.6 per cent of their income in tax compared to 35.5 per cent paid by the wealthiest.
This is partly down to the fact that VAT – which George Osborne put up in 2010 from 17.5 per cent to 20 per cent – hits the poor disproportionately compared to the rich. Low income families spend around 12 per cent of their disposable income on VAT, compared with 7.6 per cent for average households and 5.9 per cent for highest earners.
So while the rich may pay a lot of money in tax, as a proportion of their income it’s actually less than that paid by the poor.
25 Responses to “Sorry Boris, but the poor carry the greatest tax burden”
Jonkarra
Never let a fact get in the way of dogma!
swatnan
Johnson never did get that O Level in Logic. What with the disproportionate fraction of their income getting swallowed up in VAT and petrol and convenience food, the poor are also hit with the National Lottery and Bingo and Gambling taxes. Its not a fair world.
Cosimo Montagu
Lets not forget that if there was a more even distribution of wealth, many of the services the mega rich so generously “pay for” wouldn’t be needed!
Gregory
“So while the rich may pay a lot of money in tax, as a proportion of their income it’s actually less than that paid by the poor.”
I think you’re missing the point here. Whilst the very poor pay a higher proportion of their income in tax, which I’m sure we all agree is awful, the tax they do pay does little for the government coffers. It is indisputable that the poor are huge net takers from government (i.e. they pay in less than they use), and the rich are net contributors. Nothing wrong with that, but it does make Boris’ logic quite sound.
Sparky
This is incomplete analysis.
People low down the income scale are not being taxed unfairly by VAT. In fact, VAT is conspicuously weighted in favour of zero rate on subsistence items.
Food -zero rated
Domestic rent -exempt
Water to households -zero rated
Domestic gas and electricity -5% not 20%
Childrens clothes -zero rated
Prescriptions -zero rated
Physical education and sports -zero rated
Public postal services -zero rated
Books, magazines, newspapers -zero rated
I could go on and on with this list of everyday items that have no VAT. In fact, it’s the rich where VAT hits hardest. If I go out a buy a powerboat, the VAT on that boat alone, paid entirely by me, exceeds what a hundred poor people pay in a year of VAT.