Just ask the Barclay brothers
‘Rich pay more tax than they did in the 1970s, study finds’, delares a story on the front of today’s Daily Telegraph.
The ‘study’ consists of analysis of HMRC data by, er, the Telegraph, and begins (in the online version) thusly:
“The tax burden shouldered by Britain’s wealthiest has almost trebled since the 1970s, analysis of historic data reveals – further undermining the Conservative’s reputation as a ‘low tax’ party.”
That last clause tells you all you need to know about the Torygraph’s editorial take on the figures. Apparently a government which has consistenly cut taxes for the better off and plans to slash corporation tax has done too little to prove it’s ‘low tax’ bone fides.
But the story involves a common slight of hand about taxation: the suggestion that because the rich provide a large chunk (59 per cent) of the total amount of tax heading for the treasury, rich people are ‘paying more tax’, when in fact the rate of taxation for them has actually declined.
As the Telegraph eventually notes, the top rate of tax for the period they choose – the 1970s – was around 83 per cent from 1974, with a surcharge pushing this up to 98 per cent until slasher – sorry, Thatcher – was elected in 1979. The top rate today is almost half that at 45 per cent.
It’s also rather silly to complain about the rich collectively paying a bigger percentage of all tax revenue when taxation is supposed to take more from the rich, for the obvious reason that they have more money and won’t miss it.
If one per cent of the population has around the same wealth as the bottom quarter, it would be a perverse tax regime that saw more money coming from the latter.
The large increase in wealth at the top end of the economy also means both the sterling amount the rich pay in taxes and the amount left over in their bank accounts are greater than forty years ago.
(Meanwhile, most young people today are set to be the first generation in decades to earn less than their parents.)
Just imagine if top earners were paying 83 per cent now. They’d be paying even more into the treasury, and the Telegraph could go on weeping for the hard-up millionaires.
Speaking of which, when the Telegraph hails the tax burden on rich people, it presumably doesn’t mean the newspaper’s proprietors David and Frederick Barclay, who reside in the offshore tax havens of Monaco and the Channel Islands?
And under whose ownership the paper buried a major tax evasion scheme by HSBC, which just happened to be one of the paper’s most lucrative advertisers?
Expect more of the battlecry ‘cut taxes’ from an increasingly confident right-wing in this country. Yet a recent ComRes poll found 77 per cent of the public support bringing back the 50p rate of tax for top earners, including 76 per cent of Conservative voters. That’s what ‘the people’ think.
So ask yourself, where is this call for a ‘low tax economy’ really coming from?
Adam Barnett is staff writer for Left Foot Forward. Follow him on Twitter @AdamBarnett13
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