The Daily Telegraph - Your Money - - FRONT PAGE - Richard Dyson

Two charts that shat­ter Labour’s myths about fair­ness in tax­a­tion

Bri­tain’s tax sys­tem is no­to­ri­ously com­plex. It spews out a mass of data which, with a lit­tle in­ge­nu­ity, can be cut in a num­ber of ways to sup­port a range of claims.

With the Bud­get now days away and Jeremy Cor­byn and John McDon­nell, the shadow chan­cel­lor, sharp­en­ing the fo­cus of their at­tacks around the is­sues of fair­ness, let’s go back to the bare facts about who pays what in tax – and how that has changed in re­cent years. whole­sale re­moval of tax ben­e­fits from higher earn­ers.

From 2010, those who earned more than £100,000 started to lose the ben­e­fit of their per­sonal al­lowance (more on that to come).

A greater pro­por­tion of their over­all in­come was there­fore tax­able, push­ing up their ef­fec­tive tax rate.

From April 2016, higher earn­ers (those on £150,000 or more) also started to lose the abil­ity to claim tax re­lief on pen­sion con­tri­bu­tions. Sep­a­rately, the to­tal amount that can be built up within a pen­sion has been cut by 44pc since 2010, again af­fect­ing only the well off.

A suc­ces­sion of prop­erty-re­lated tax changes – from stamp duty to the re­moval of mort­gage in­ter­est tax re­lief – also flooded in. Stamp duty, hated though it is in most quar­ters, is paid dis­pro­por­tion­ately by Lon­don­ers and the rich.

Div­i­dend tax­a­tion was in­creased for wealthy in­di­vid­u­als with large share­hold­ings. And the list could go on. The top graph shows how much the rich­est now con­trib­ute to the to­tal tax pot of Bri­tain against the con­tri­bu­tion of the bot­tom

The up­per­most 1pc of earn­ers now con­trib­ute al­most 30pc of tax. The av­er­age-to-lower earn­ers con­trib­ute a dwin­dling por­tion. The graph does not prove, of course, that tax poli­cies them­selves ac­count for this larger con­tri­bu­tion by the wealthy: it could be a func­tion of their in­creased

It is a plain fact that the ‘rich elite’ are pay­ing more into the sys­tem than ever

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