FAO Schteve

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The recent IFS tax analysis and comparison is interesting on this.

In fact, the UK taxes the middle bracket very lightly compared to most of Europe: “The average tax rate on median full-time earnings in the UK was 28% in 2016–17. This is much lower than it would be under the tax systems of the other countries shown in Figure 5, for which the average is 44%. Since 2016–17 (the year for which this analysis was undertaken), the income tax personal allowance has been increased more quickly than inflation, which will have further reduced income tax payments at the median in the UK.”

This makes the UK uniquely dependent (for income tax) on a very few individuals paying an awful lot of tax, instead of it being more broadly spread as in most European countries: “In 2019–20, the top 1% of income tax payers (those with gross incomes above £188,000) received 13% of the pre-tax income of income tax payers and contributed 30% of income tax receipts (Figure 7). The top 10% of income tax payers (those with incomes over about £59,000) received one-third of the pre-tax income of taxpayers and paid 61% of income tax, while the bottom half of income tax payers received one-quarter of the pre-tax income and accounted for less than 10% of income tax receipts.”

It’s all here, fascinating stuff User Posted Link

Posted By: Old Git, Nov 27, 17:59:29