Written by Lisa Auret
The burgeoning British scandal over the misuse of government expense accounts is claiming its first major victims and setting the stage for a major shake-up in the country's leadership.
"It's an opportunity for (Prime Minister Gordon) Brown to rebrand his party somewhat. So there may be some major changes," Eamonn Butler, director at the Adam Smith Institute said.
Published on CNBC here.Read more...
Written by David Fickling
“We’re bust and we’re going to make ourselves feel richer by printing money," wrote Eamonn Butler of the Adam Smith Institute.
Published in the FT here.Read more...
Workers in the UK have to work until 14 May to cover all of the tax they must pay in 2009, says a think tank.
This is a shorter wait than last year, when the so-called "tax freedom day" arrived on 22 May, the Adam Smith Institute said.
The average worker must work 134 days in 2009 to earn the money going to the government through income tax, National Insurance, VAT and other taxes.
But factoring in government borrowing extends that period to 176 days.
"Running up deficits can be described as a form of deferred taxation," said Gabriel Stein, chief economist at Lombard Street Research who carries out the calculation.
"The effect will be that when the economy recovers - as it will eventually do - the UK tax burden is likely to rise much faster than would otherwise have been the case and tax freedom day is likely to creep later and later in the year."
The calculation also includes outlays such as fuel, alcohol and cigarette duties, car tax, and council tax.
Excluding government borrowing, the day falls earlier than at any time since 1973.
Business failures and rising unemployment means that the government is unable to bring in as much tax revenue, prompting greater borrowing.
The Institute said that the gap between tax freedom day based on actual revenues - 14 May - and tax freedom day based on government spending - 25 June - was the widest it had been since the early 1970s.
The 25 June date was also the latest since 1984.
Published on the BBC hereRead more...
Click here to listen to Dr Eamonn Butler discuss Tax Freedom Day on Radio 4. (Starts 53:25)Read more...
Click here to listen to Tom Clougherty discuss Tax Freedom Day on Radio Five Live. (Starts 22:45)Read more...
Written by David Stevenson
Happy Tax Freedom Day!
Today's the day when the average Briton has earned enough to pay his annual tax bill. In other words, today you stop working for the Government, and start working for yourself. And the – apparent - good news is that this year, we're enjoying the earliest Tax Freedom Day since 1973.
But before you start popping the champagne corks, there's a very nasty sting - or two – in the tale... The bad news on Tax Freedom Day
This year, it's 'only' taken British taxpayers the first 135 days of the year to pay off their debt to the taxman, according to the Adam Smith Institute, the independent think-tank which crunches the numbers.
Of course, it doesn't work out that way in practice. Employees on PAYE pay a tax slice every month, while the self-employed get saddled with a once-a-year bill. But it's still a useful guide to see how large a slice of our total incomes is being surgically removed by the Revenue. And this year, Tax Freedom Day has actually come at its earliest date since 1973.
So are celebrations in order? Sadly, no. TF Day is worked out on what we actually pay in tax. As the economy tanks, people pay less tax because incomes shrink and unemployment rises. So that's the reason it's early this year – not because the Government has slashed tax rates.
In fact, if you factor in government borrowing (which we'll have to pay for eventually), then TF Day wouldn't arrive until 25th June – which would be the latest point in the year since 1984.
And the real bad news is that this gap between TF Day based on tax take and TF Day based on total government spending is rapidly widening as the government's annual shortfall gets larger and larger. The official gap this year is forecast to be £175bn. In reality, it's almost certain to be a lot bigger.
Published on MoneyWeek hereRead more...