30 May 2011
The Adam Smith Institute, the libertarian think tank, has released calculations today (Monday 30th May 2011) revealing the shocking length of time we work to pay off our tax bill. Britons have worked for a full 5 months this year to pay their taxes, with every penny earned in the UK between January 1 and May 29 taken by the taxman to support government expenditure.
This means that Tax Freedom Day, the day when people stop working for the government and start making cash for themselves, will come on May 30 in 2011 – 3 days later than in 2010.
The main reason for this is that the government has raised VAT, in order to help reduce the UK’s record budget deficit.
New calculations by the ASI also reveal the worrying extent of the UK’s debt. Our burden of debt is so great that UK income taxpayers would need to work for nearly a year and a half (525 days) - with their entire wage packet going to the government, and not a penny being spent on public services – to pay off the national debt.
Dr Madsen Pirie, President of the Adam Smith Institute identified the linkage between the lateness of Tax Freedom Day and the government’s attempt to tackle the deficit and UK debt:
“The last government left an appalling legacy. Its reckless spending has driven Britain into record levels of debt that threaten the lives and happiness of future generations. Bringing down that debt has to be an absolutely urgent priority. However it isn’t enough to merely cut spending. We need targeted tax cuts to encourage economic growth.”
Sam Bowman, Head of Research added: “Tax Freedom Day underlines the huge burden of government on working people’s lives. For five months of the year, we are slaves to the state. No wonder growth is so slow – we need robust tax reform now, bringing lower, simpler, flatter taxes. The government should resolve to make Tax Freedom Day something we can celebrate earlier and earlier each year.”
A full breakdown of how long it takes Britons to pay off each tax can be found in the Notes to Editors (below). The tax burden also varies by region, falling more heavily on some and more lightly on others. The figures below show, in ascending order, how long each region has to work in 2011 to pay income tax:
Britons as a whole work the following amount of days to pay each of the following taxes:
How is Tax Freedom Day calculated?
For more information