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”
suchan104
“Attacking disabled people”?
Labour’s 2010 Manifesto: “More people with disabilities and health conditions will be helped to move into work from Incapacity Benefit and Employment Support Allowance, as we extend our tough-but-fair work capability test. This will help reduce the Incapacity Benefit claims of 1.5 million people by 2014, as we move those able to work back into jobs.”
Translate: If the Tories do it then we’ll complain bitterly about their assault on the disabled, but if we do it then of course we’ll claim that we’re doing in a “tough-but-fair” manner. Of course, we had chance to do this for 13 years but failed miserably because we were busy taking away the 10% tax rate and getting people hooked into the client state by setting up a tax credit system byzantine in its complexity.
ArgieBee
http://www.ons.gov.uk/ons/rel/household-income/how-indirect-taxes-can-be-regressive-and-progressive/2001-02—2008-09/art-regressive-and-progressive-taxes.pdf
Explains why indirect taxes appear regressive.
suchan104
2008 Institute for Fiscal Studies Report demonstrated quite clearly that while incomes for the richest were “racing ahead”, thanks to increases in National Insurance, Council Tax and a plethora of “stealth” taxes including the Green taxes on energy, the fuel tax escalator, rises in tobacco and alcohol duty, as well as the abolition of the 10% tax rate (partially ameliorated by more tax credits and the employment of more public sector workers to administer them), left the poorest and middle classes with a real reduction in their household incomes. I’ll also just remind the Left of how Labour used to tax Private Equity billions at 18%, lower than the basic rate for the poorest.
So for the Left to preach about Tories favouring the rich has a large stench of hypocrisy about it.
Tseug
Tell me why these companies spend billions on advertising. For fun?
TM
Good point. Taking away the 10% tax rate was a disaster that alienated the poor and low waged: erm, aren’t the Labour Party supposed to be fighting for the ordinary folk at the bottom???
You engaged on one point though; did you disagree with everything I said?
Boris represents the wealthy, the privileged and the connected. He is a jolly uber Right wing kind of guy because that’s the world he inhabits and the world he comes from, the world that is alien to most of us and one which most of us are kept out of one way or the other. Yet, somehow, these people are voted in by people who for the most part probably don’t even share in that privilege in any way. I may add that Boris represents London and the South East and to be frank that is all that matters to them. Power, wealth, politics, and many of the jobs that seem to exist in London and the South East need moving to other parts of the country. When we as ordinary people start demanding more fairness and start questioning and challenging the divine right many of these privileged people seem to hold about themselves to rule, to control and to always have unquestioned wealth and privilege, we may slowly begin to move forward and actually become a democracy in more than name only. Which side are you on?