Guess how much tax the rich pay?

Where would the Liberal Democrats be without the insinuation that the rich are let off lightly by the tax system? But I would like to let CoffeeHousers in on what seems to be a secret. The richest 10% actually stump up the majority (53%) of tax collected in Britain. And the richest 1% stump up a staggering 22% of the tax collected – twice their share of earnings. This is a statistic which should warm the heart of the most ardent redistributionist. It’s all in this Revenue and Customs excel sheet here – scroll to the bottom. And why do we have this situation? Not because of anything Labour’s done. The step change came in 1988, when Nigel Lawson cut the top rate of tax. The top 1% then paid a far lower 14% of the tax collected. When their top rate was cut, they earned and declared more and the system became fairer: turns out that Lawson was the biggest redistributionist of them all. For the LibDems, this points to a horrible, unpalatable truth: if you want to squeeze more tax from the rich, cut their tax rates. As JFK said it’s “the soundest way to raise the revenues in the long run”.