Tuesday, December 31, 2024
A failure of equality
They say that the UK’s tax system is meant to operate progressively, asking the richest to contribute more in order to tax the middle and poorest in society less, which is a principle that is still widely supported by the public, however their analysis found something completely different. They say that:
* The poorest 10% of households paid on average 48% of their income in tax in 2022/23
* The richest 10% of households, however, paid on average just 39% of their income in tax
* Council tax is a key source of disproportionate taxation, with the poorest 10% paying 7% while the richest 10% pay just 1.2%
* Similarly, VAT hits the poorest harder, with the poorest 10% paying 12% while the richest 10% pay just 3%
* The post-tax income for the richest 10% is £112,874, over 12 times higher than the poorest 10%’s post-tax income of £9,651.00
Unfortunately, this is merely the tip of the iceberg of the inequality in our tax system. The super-rich are shifting massive amounts into wealth and income from wealth, where taxation is even more disproportionate. This is how we get situations where millionaires like former Prime Minister Rishi Sunak can pay a tax rate of only 23% on £2.2m of income. As you get higher up the scale of the super-rich, the distortion becomes even more extreme. In 2024, billionaire James Dyson, 5th on the Sunday Times Rich List, paid just 0.68% of their total wealth in tax.
Now we have a Labour government one would think that they might be keen to correct these discrepancies, however it is clear already that this is not a priority for them. Will any party find the courage to propose changes to correct this imbalance? I'm not holding my breath.
