Sunday, March 19, 2006
Labour Has Doubled Income Tax Since 1997
Since 1997 the government's take from income tax has risen by 109%. This year we will pay £145 billion in income tax. In 1996-97 we paid £69 billion, according to Grant Thornton. We also pay 125% more Inheritance Tax than in 1997. The number of higher rate tax payers has risen by 62% because thresholds have not risen quickly enough. So let no one tell me we shouldn't be making the case for lower taxes. All power to the elbow of the Taxpayers' Alliance.
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7 comments:
Isn't economic growth a wonderful thing?
Unlike the Tories the Labour government has not presided over a recession (never mind the two that the Tories managed).
And, Iain, in case you missed it. David Cameron won the Tory leadership election and he has said tax cuts aren't a priority.
Yes, economic growth is a very good thing, but if the income tax take has doubled then surely the size of the economy must have doubled. It hasn't. So therefore the tax burden has risen.
I am well aware of what David Cameron has said on tax cuts. He has said we should share the benefits of economic growth. Which must mean a lower tax burden.
Doesn't mean lower absolute tax take though, does it? Quite the opposite in fact. So the news is that taxes will rise under Cameron. The arument is just about how fast they rise.
Mind you, there is one way that taxes could fall under the Tories - if they repeat their past trick of smashing the economy into the brick wall marked recession.
Incidentally, money GDP has risen by 66% from 1996 -97 to the Treasury's prediction for 06/07. That is what income tax should be measured against. In other words if the burden of income tax had remained exactly constant relative to the economy as a whole the take would have risen by 66% in any case.
Look up GDP deflator on the Treasury website for more details.
The percentage share of GDP taken in tax is the least worst measure of this sort of thing. it has gone up a few points but "income tax has doubled" is a deeply misleading statement for the reasons set out above.
Given the state of national infrastructure in 1997 some increase of taxes was needed.
anon,8-32,10-46.
you are without doubt a financial/economic illiterate.As such you probably have a high position in the treasury or the New labour project.
To blame the Tories for two recessions ignores-conveniently a lot of factors that I do not have the time to go into.
'if they repeat their past trick of smashing the economy into the brick wall marked recession. '
really takes the biscuit.The UK, like the labour party,and the consumer are drowning in debt.
Given how stupid you obviously are it will be of no concern to you that
a the 2 and 10 year Gilt yields have inverted in the UK,Aus,USA
b the japs will likely begin to tighten monetary policy soon
c sterling (along wqith the dollar)is hanging over the edge of a cliff in terms of it's value given the current account and fiscal deficits
d public sector employment has risen by 1 million since 1997 and private sector..is down 1 million.
I could go on Anon.Begs the question,you are on message,you are obviously not the brightest
Are you Daivd Milliband in disguise?
rigger, you are talking tripe. Both public and private sector employment has risen and the figures you "quote" are clearly made up. The change in gilts is an oddity to do with pension funding requirements and actually shows that we need to be less concerned about debt than you say - because we can refinance it all at 1%.
By the way, the point remains. Even if you accept the Cameron formulation of "sharing the proceeds of economic growth" means something, the something it must mean is that the absolute tax take will keep on rising.
The Tories always had loads of excuses for the two recessions, but I'd submit that hiking interest rates in the middle of the first and then letting monetary policy go bonkers in the run up to the second had a lot of do with them: and both were down to government policy decisions. Don't blame us, we were only the government doesn't wash.
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