- Tax Freedom day falls three days earlier than it did in 2013; George Osborne deserves some credit, but…
- UK residents work 148 days of the year solely to pay taxes; that is every day from January 1 to May 28.
- Cost of government day is 26th June, six days earlier than in 2013, illustrating that the government is making small efforts to stop borrowing from future tax income.
This year's Tax Freedom Day, the day when Britons stop working for the government and start working for themselves, falls on 28th May, according to Adam Smith Institute calculations.
This means that Britons work 148 days of the year solely to pay their taxes (including direct taxes like income tax and national insurance, and indirect taxes like VAT and corporation tax). This is three days earlier than 2013's Tax Freedom Day, which is not statistically significant.
Tax Freedom Day is designed to illustrate to the public what real level of tax is, which the lengthy, complex nature of Britain’s tax code can often obscure. The UK's Tax Freedom Day is more than a month later than the United States', where citizens start earning for themselves on April 21st.
Cost of Government Day falls on June 26th, six days earlier than it fell in 2013. While this suggests slight improvement from last year, the government continues to drive up the national debt for almost another month after Tax Freedom Day by spending billions of pounds worth of future taxed income.
The ASI calculates Tax Freedom Day by measuring local taxes, direct and indirect national taxes, and national insurance contributions as a proportion of the UK’s national income (41.09% per cent in 2014), mapping that proportion onto the days of the year.
Director of the Adam Smith Institute, Dr Eamonn Butler, says:
“Tax Freedom Day comes three days earlier this year, but it is still outrageous that the average person in Britain has to work nearly five months of every year solely to pay taxes. Are we really getting five months' worth of value from our bloated government sector? Does it really need to do all the things it has taken upon itself, at our expense?
“In this World Cup year, it is salutary to remember that when England collected the trophy in 1966, Tax Freedom Day fell more than a month earlier – and even then, people complained about the burden. Since then, the burden has edged up decade by decade. But high taxes stifle economic growth. And the higher that taxes are, the more people will try to avoid or evade them.
“The Treasury hates Tax Freedom Day because it expresses the real tax burden so starkly. Officials and ministers would much rather rely on stealth taxes and Byzantine complexity in order to conceal the true size of out tax bills. But they won't get away with it – the public has a right to know how much we are being forced to pay in order to support the government.”
Steve Baker, Conservative MP for Wycombe and a member of the Treasury Select Committee adds:
“As an MP, I see how the services provided collectively through the state so often fall short of people’s needs and expectations so it is a shocking fact that Tax Freedom Day falls at the end of May. Even more appalling is that Cost of Government Day falls in late June. The Adam Smith Institute has done a great service by so clearly illustrating the cost of government, the burden of taxation and the scandalous gap between the two. Politicians have a great deal of explaining to do.”
David Ruffley, Conservative MP for Bury St Edmunds, adds:
“Tax Freedom Day is not just an economic argument, it is a moral one. The stubbornly high UK national debt is not just a drag on growth, it is also an unconscionable burden on future generations. To solve this problem we need to do much more to cut the size of the state. This must be accompanied by reductions in personal and corporate tax to unleash the spirit of enterprise that drives economic growth and higher living standards.”