The BBC corrects the Labour party's incorrect statements on tax

The BBC factcheck site did a very good article during the election which proved that Labour was talking nonsense about who pays the most tax.

The article is worth revisiting.
"The claim: Low and middle earners are bearing the burden of the tax take.

Reality Check verdict: The government is very reliant on richer people for its funding. More than a quarter of income tax is paid by the 1% of taxpayers with the highest incomes."

"The burden in terms of the tax take is falling on middle and low earners," Labour shadow Chancellor John McDonnell told BBC Radio 4's Today programme during the election.

"In fact, the tax base is very reliant on rich people, with income tax becoming increasingly reliant on them. The Resolution Foundation, which does a great deal of work on inequality, says that the income tax system is relying too much on the richest 10%, which is a problem because their earnings are volatile."

Read more  here.

Comments

Jim said…
i was never really too interested in "who pays the most" its got to be the rich to be logical. if we has a flat tax system the rich would still pay the most because they earn the most, its simple logic.

Why then am I all for people having funds in tax havens, well its because they dont have to pay this money and instead can use it to invest in things.

I am completely against governments demanding all this from people, who have no say in what it is spent on. If i had my way there would be a referendum each year on the governments spending, and if that is not acceptable, then they should revisit and announce a new one. its not hard.
6:00 pm
Chris Whiteside said…
And the rich do pay the most: as the fact check article says the richest 1% pay about 27% of income tax and the richest 50% paya about 90% of income tax.

I don't actually have a problem with that, but if you try to increase it further the results will tend to be counterproductive.

I tend to agree with your previous suggestion, Jim, that Britain's economy would work better with fewer exemptions and lower tax rates, which would probably bring in more money from the rich, not less and certainly make things more simple.

9:48 pm
Jim said…
Im not disagreeing that the rich pay the most. Its pretty clear they do. I also agree the take would increase with a lower rate, less complex system.

Also i think a lot of people would be more inclined to pay taxes if it was more clear on what each tax is being used to fund. At the moment we have lots and lots of different taxes each one feeding in to this big black hole that is public spending. I would like to see things (making up figures as I go so dont quote them)

37% of income tax funds the NHS
15% of Income tax funds the fire service
Nat ins pays for pensions and welfare
VAT pays for this
road tax pays for that

I just think if people knew and could see where each tax is spent and it was fully auditable then there would be less resistance to paying it.
9:20 am
Chris Whiteside said…
I think that is a really good idea and if I am ever in a position to push for it I will do so.
10:09 am
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