For those who argue people are overtaxed in the UK and will run away if rates aren’t cut

Green Politics

This table has just been published by the OECD and shows the "tax wedge" taken from employment earnings for all 34 OECD countries.

Richard Murphy is the founder of the Tax Justice Network

This table has just been published by the OECD and shows the “tax wedge” (the difference between before-tax and after-tax earnings) taken from employment earnings for all 34 OECD countries:

The OECD say of this:

OECD

Note then that this “wedge” includes employer’s national insurance – which most people do not appreciate is paid on their behalf.

The UK is at 32.3 per cent, well down the list.

Of course, that may also be why we have such a high deficit: we are undertaxing high earnings in particular.

But there’s no case for saying we’re overtaxed, most especially at high rates. That’s for sure.

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11 Responses to “For those who argue people are overtaxed in the UK and will run away if rates aren’t cut”

  1. Aeomer

    It’s tempting to compare the tax regime of a supposedly higher taxed country to the UK and say we have it easy. The figures here only cover direct taxation. Because of the huge number of double and triple taxation points in the UK our actual tax wedge is 71.3%. That is for every pound you spend, 71.3p will go back to the government in some form of taxation. You may think when you buy a product from a shop the taxation is, generally, 20% VAT, but remember the cost of the item also includes all the taxation the shop and its employees have to pay, too. That’s around 51% indirect tax on the produce before the 20% VAT – and let’s not forget the income tax you paid before you received to money to buy that item.
    The article above is a perfect example of broken thinking and double talk by those with a vested interest in keeping UK taxation high.

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