Celebrate Tax Freedom Day, May 14 2009
But you'll still have 42 days hard labour to fill Brown's borrowing hole
Tax Freedom Day 2009, the day in the year when the average Brit has earned enough to pay his tax bill, is tomorrow, May 14. That's the earliest date since 1973.
But according to the Adam Smith Institute, who calculate the UK's Tax Freedom Day every year, there is little cause for celebration. If you factor in government borrowing Tax Freedom Day does not come until June 25 – the latest date since 1984.
More worryingly, the gap between these two Tax Freedom Day measures – one representing taxes collected, the other how much the government actually spends – is now 42 days. That's higher than it was at its previous peak in 1975, and may represent the widest gap revenue and expenditure since the Second World War.
The Institute's director, Dr Eamonn Butler, commented:
"Put simply, the government is now living further beyond its means than it did even in the dark days of the 1970s. We might not be paying for it this year, but Brown's borrowing binge is going to mean higher taxes for all of us in the years to come."
For more information please contact:
Dr Eamonn Butler or Tom Clougherty on 020 7222 4995
Notes for editors:
- Tax Freedom Day shows the total tax paid each year by an average taxpayer, including indirect taxes, local taxes and National Insurance contributions, as a percentage of that individual's total income.
- It is calculated by comparing general government tax revenue with the Net National Income (NNI). The total of all government tax revenue – direct and indirect taxes, local taxes and National Insurance contributions – is calculated as a percentage of NNI at market prices. The result is then converted to days of the year, starting from 1 January. In order to factor government debt into the Tax Freedom Day, the Public Sector Net Cash Requirement (PSNCR) is added to the tax revenue.
- Tax Freedom Day is calculated for the Adam Smith Institute by Gabriel Stein, a Swedish economist who has lived in the UK since 1990. In 1981 he worked in the Israeli Ministry of Finance. From 1982 to 1991 he ran his own economics and public affairs consultancy, Stein Brothers. He is currently a director of Lombard Street Research Ltd.
- More information is available on the Tax Freedom Day web-site: http://www.adamsmith.org/tax-freedom-day/