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TAX FREEDOM DAY SLIDES INTO JUNE AS TAX BURDEN GROWS
Taxpayers worked 154 days this year to pay their taxes, four days longer than 2015
- Tax Freedom day falls four days later than it did in 2015
- Brits work 154 days of the year solely to pay taxes; every day from 1st January to 2nd June
- Tax receipts projected to be 42.27% of net national income this year
- Government needs to cut spending and keep tax reform a priority
- Adam Smith Institute calling on government to raise National Insurance Threshold to help lowest paid in society
Today is Tax Freedom Day in the UK, according to calculations by economic think tank the Adam Smith Institute. It is the first day of the year when Britons stop working to pay their taxes and start earning for themselves.
British taxpayers have worked a grueling 154 days this year just to pay their taxes, four days more than in 2015. This year also sees the date creeping into June for the first time in fifteen years, a red flag that Britons’ tax burden is moving in the wrong direction.
Whilst net national income has increased by £34.6bn from 2015, government has actually gobbled up £35.4bn more in taxes, meaning the government has actually left Britons £1bn worse off than last year, a reminder that tax reform must remain a priority.
The ASI is calling on the government to alleviate the pressure on the lowest earners in society and raise the threshold of National Insurance Contributions from £8,060 up to £11,000, the same level as income tax. Both should then be pegged to the annual salary of a full-time minimum wage worker, so low earners pay no tax on their earnings.
As well as helping low paid workers the threshold could even save the Government money in the long term, as many of the lowest paid would be entitled to less in benefits such as housing support.
Director of the Adam Smith Institute, Dr Eamonn Butler, said:
“The Treasury hates Tax Freedom Day because they don't want us to know how much tax we really pay. They conceal the tax burden with stealth taxes that we don't even realise we're paying.
“But it’s shocking that the government takes over two-fifths of the country's earnings – and then borrows more. We work longer for the government than mediaeval serfs had to work for their Lords!
“It is absurd that people on the minimum wage are liable for National Insurance Contributions, which raise their cost to employers and make it harder to move from benefits into work. The poor are also worst hit by regressive taxes like excise duties on what they buy."
Tax Freedom Day is designed to reveal to the public how much they really pay out in taxes, which Britain’s lengthy tax code can often obscure. ASI calculations include direct taxes like income tax and national insurance, as well as indirect taxes like VAT and corporation tax.
John Redwood, Conservative MP for Wokingham, added:
“I think it is wrong that people have to work for the government until 3 June and for their families and themselves for only a little over half the year. I want us to leave the EU so we have more of our own money to spend. The UK deserves a tax cut and leaving is the way to get it.”
Notes to editors:
For further comments or to arrange an interview, contact Flora Laven-Morris, Head of Communications, at email@example.com | 07584 778207.
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 net national income (42.27% per cent in 2016), mapping that proportion onto the days of the year.
Tax Freedom Day figures are not available up-to-date for calendar years so they are proxied from government and OBR forecasts and financial year numbers. They are then revised when exact numbers become available.
Click here for more information on previous Tax Freedom Days.
The Adam Smith Institute is a free market, libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.