Britons will work for 149 days to pay their taxes in 2011, according to respected free-market think tank the Adam Smith Institute. Every penny earned in the UK between January 1 and May 29 will be 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 working for themselves, will come on May 30 in 2011.
The most up to date government statistics suggest that Tax Freedom Day came on May 27 in 2010. This means that Britons will spend three extra days working to pay their taxes in 2011, compared with the year before.
The main reason for this is that the government has raised VAT, in order to help reduce the UK’s record budget deficit.
Tom Clougherty, executive director of the Adam Smith Institute, condemned the VAT rise saying:
“As well as hitting every household in the country, the VAT hike is going to dent consumer confidence and put a dampener on our economic recovery – as the Office of Budget Responsibility has already pointed out.”
“The government is right to give priority to cutting spending and plugging the deficit. But as Tax Freedom Day shows, Britons are still desperately overtaxed. The fact that we spend almost five months working for the State – and only seven months working for ourselves and our families – is a shocking indictment of big, wasteful government.”
Dr Eamonn Butler, director of the Institute, added:
“The coalition should examine the possibility of making targeted tax cuts now to encourage economic growth. But in the long term, they need to fundamentally overhaul the entire tax system. Lower, simpler, flatter taxes would be fairer for individuals, and better for the economy.”