A new report has shown that the famed ‘tax gap’ between the UK and comparable European states does not exist. There is a prevailing myth in British economic discourse that middle and lower earners are ‘undertaxed’…
Left-wing think tanks and the Institute for Fiscal Studies have often claimed that general taxation is comparably low in Britain, which is explained by its lower rate of social security contributions. In 2019 Britain “raised 6.6% of GDP [from National Insurance], compared with 12.0% on average for the EU14.” National Insurance is usually counted as a social security contribution when it is an extension of income tax here in Britain…
The new paper from Robert Colvile in the Centre for Policy Studies points out that, while SSCs in European countries usually pay towards things like pensions, they do not in Britain. The UK has a abnormally high rate of private pensions contributions thanks to compulsory auto-enrolment. Serving as a quasi-tax…
Colvile adds that, were privately purchased social care (£8.3 billion in annual spending) and student loan repayments added to the statistics as well the UK would sit near the top of the pack in terms of the ‘tax gap.’ Those costs are more often covered by the welfare state in European countries…
The left has broadly realised that it can not longer raise additional taxes on the rich. Colvile points out “the top 1% take home 9.4% of pos-tax income, but pay 26.6% of income tax, almost three times more than the entire bottom half.” Sources in No10 say the Labour government is acutely aware of this – with Starmer having promised not to raise any of the broad taxes…
Leftist think tanks & Labour outriders are now beginning to argue that general taxation on middle and lower earners needs to rise to pay for a larger state. In reality Britain sits in the middle of the pack in the most charitable calculations and middle and lower earners are in fact heavily overtaxed…
Kemi Badenoch at the 1922-ConHome bash last night:
“I did praise [Burnham] for his stamina, it was amazing. All I had to do was sit back and lie there. I didn’t have to do anything at all…”
