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.
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25 Responses to “Sorry Boris, but the poor carry the greatest tax burden”
Sparky
Like what?
Sparky
National Lottery, Bingo and betting and gaming are all exempt for VAT. And as purchases, they are all discretionary items. Convenience food is also a discretionary item. So the poor aren’t being ‘hit’ with these at all.
GO
This whole line of argument is absurd. A thought experiment:
Imagine a mini-society made up of 100 bosses on £1 million a year and 100,000 workers on £10,000 a year. Suppose the tax burden is 35% across the board.
The 100 bosses (roughly the top 0.1%) pay £35 million in tax – about 9% of a total £385 million.
Suppose the national income of this country then rises from £1.1 billion to £1.2 billion.
Scenario 1: the bosses double their own pay to £2 million while the workers’ wages are frozen. The bosses now pay £70 million in tax – about 17% of a total £420 million.
Scenario 2: the bosses freeze their own pay and workers’ wages increase by 10% to £11,000. The bosses continue to pay £35 million in tax, but this is now about 8% of the £420 million total.
Boris Johnson, like a lot of right-wingers, asks us to admire the bosses in Scenario 1 for generously taking more of the tax burden on their own shoulders, and berate the bosses in Scenario 2 for selfishly shifting that burden on to the shoulders of their workers.
As I say: absurd.
Huw Jones
Boris’ analysis is flawed. The proportion of taxpayers and the proportion of the tax they pay are two different measure that should not be compared. It an analysis straight from ‘How to lie with statistics’.
We can say with certainty that 1% of taxpayers receive 1% of tax bills. This is true across the income range, its true for the richest 1% and its also true that the richest 0.1% of taxpayers account for 0.1% of tax bills. We’re told that the 0.1% richest pay 14% of tax as though its unfair. What we’re not told is the proportion of national income they enjoy. If the 0.1% richest enjoy 15% (or more) of income then they are unfairly under taxed.
Please Boris, tell us how much the 0.1% richest ‘earn’. Then tell us whether its fair… or not
https://www.facebook.com/secambslabour/posts/317837421688969
Bob Allison
Concupiscence:
Insubordination of man’s desires to the dictates of reason, and the propensity of human nature to sin as a result of original sin. More commonly, it refers to the spontaneous movement of the sensitive appetites toward whatever the imagination portrays as pleasant and away from whatever it portrays as painful. However, concupiscence also includes the unruly desires of the will, such as pride, ambition, and envy. (Etym. Latin con-, thoroughly + cupere, to desire: concupiscentia, desire, greed, cupidity.)