Tax bur­den is at a 50-year high for strug­gling fam­i­lies

The Sunday Telegraph - - Front page - By Christo­pher Hope

THE tax bur­den on Bri­tish house­holds and busi­nesses has reached a 50-year high, anal­y­sis shows.

Bri­tain’s tax bill has hit a new high of 34.6 per cent, smash­ing through the 34.3 per cent of gross do­mes­tic prod­uct (GDP) seen in the early Six­ties, ac­cord­ing to his­tor­i­cal data an­a­lysed for The Sun­day Tele­graph by the Tax­Pay­ers’ Al­liance. It was as low as 32.7 per cent as re­cently as 2015.

The al­liance fears that Of­fice for Bud­get Re­spon­si­bil­ity fore­casts show that the Trea­sury wants to keep the tax take at this level for the next five years.

Last night for­mer Cab­i­net min­is­ters de­scribed the fig­ures as “shock­ing” and an “em­bar­rass­ment” for a Tory Gov­ern­ment that was elected in part on a plat­form of bear­ing down on tax. The al­liance said that cut­ting the tax bur­den to 29.9 per cent of GDP – lev­els last seen in the fi­nal year of John Ma­jor’s gov­ern­ment in 1996-7 – would cut tax by nearly £100bil­lion. The tax take was just 28.5 per cent in 1993-4.

In the­ory, that could be done by abol­ish­ing cap­i­tal gains and in­her­i­tance tax, air pas­sen­ger duty and stamp duty, halv­ing na­tional in­sur­ance and cut­ting in­come tax.

The cam­paign group said that while politi­cians of­ten ex­pressed con­cern about the cost of liv­ing, too few con­sid­ered tak­ing less money away from fam­i­lies and busi­nesses by low­er­ing taxes. It pointed out that re­cent

calls for new taxes on meat prod­ucts, dig­i­tal ser­vices, plas­tic and even cof­fee cups were ex­am­ples of how the tax bur­den can in­ex­orably creep up.

Priti Pa­tel, a for­mer Cab­i­net min­is­ter, said: “These shock­ing num­bers... re­ally bring home how high our taxes have gone up. It’s an em­bar­rass­ment to this or any gov­ern­ment to take so much money from hard-work­ing tax­pay­ers.

“Lower taxes pro­mote eco­nomic free­dom which leads to more growth, more jobs and more money in peo­ple’s pock­ets. That is the only and the Con­ser­va­tive way for­ward.”

Owen Pater­son, an­other for­mer Tory Cab­i­net min­is­ter, said: “These fig­ures are shock­ing. High taxes slow eco­nomic growth.”

Ev­i­dence has sug­gested re­duc­ing tax rates can bring in more rev­enue. A cut in cor­po­ra­tion tax from 28 per cent in 2010-11 to 19 per cent this year is es­ti­mated to have in­creased tax re­ceipts by 25 per cent. In­come tax re­ceipts from the ad­di­tional 45p rate in­creased by 37 per cent in real terms af­ter the rate came down from 50 per cent in 2010-11 to 45 per cent in 2013-14

John O’Con­nell, the chief ex­ec­u­tive of the Tax­Pay­ers’ Al­liance, said: “For all the talk of in­creas­ing taxes to help the poor­est the truth is that the steady in­crease of the tax bur­den of­ten hits pre­cisely those fam­i­lies the hard­est.

“Other coun­tries like the US and Aus­tralia are cut­ting taxes and we should look to repli­cate that to boost the econ­omy and ease the bur­den on the most hard-up tax­pay­ers.”

A Trea­sury spokesman said: “Since 2010 the Gov­ern­ment has con­tin­ued to in­crease per­sonal al­lowance mean­ing that 32 mil­lion in­di­vid­u­als will now see their in­come tax bill re­duced next year. We are help­ing fam­i­lies by freez­ing fuel duty, in­creas­ing the na­tional liv­ing wage to £8.21 and cut­ting cor­po­ra­tion tax to help over a mil­lion busi­nesses.”

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