Shan Oakes, the excellent Green Party candidate for Haltenprice and Howden, asks whether it is true that the poorest pay more in tax than the richest, as a proportion of their income.
The straight answer seems to be - Yes. And No. But then again, Yes, possibly.
The IFS says:
In 2007-08, the poorest fifth of households had a gross annual income of £11,105 on average, and paid £4,302 a year in tax, a ratio of 38.7%. Meanwhile, at the other end of the scale, the richest fifth of households had an average gross annual income of £74,247, and paid £25,926 in tax, on average, a ratio of 34.9%.
The IFS proceeds to try to qualify the figures, as is the way with accountants.
This is my take:
The poorest fifth ("quintile") of the UK population have an income before benefits of: £4,700
After benefits this goes up to £14,300
(source)
Tax paid by poorest fifth: £4,302
(source)
Out comes the calculator:
14300 / 4302 x 100 = 30%
The poorest quintile pay 30% if their income in tax.
In 2007-08, the poorest fifth of households had a gross annual income of £11,105 on average, and paid £4,302 a year in tax, a ratio of 38.7%. Meanwhile, at the other end of the scale, the richest fifth of households had an average gross annual income of £74,247, and paid £25,926 in tax, on average, a ratio of 34.9%.
The excellent Missing Billions report tells us that individual persons on incomes of £100,000+ pay tax at 30.8%, rising to 37% at 150,000 and 40% at £200,000 and above.
So it seems that the rich do pay more in tax, just about.
However, the poor do not have the benefit of access to tax havens, unlike the rich.
Missing Billions shows how the rich avoid their taxes, not least through tax havens. Company bosses can get their tax down to 19% with the use of havens.
The UK loses about £23,000,000,000 a year through tax havens. In the times of austerity that lie just beyond the political horizon of May 6th, a sensible Government will terminate these tax havens with extreme prejudice.
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