My old friend Allister Heath has just sent me over some stats which show that the poor pay more of their income in tax than the rich. Allister reports that “the bottom fifth of earners pay 38.7 of their gross income in total tax, the next fifth 32.7 per cent, then 34.6 per cent, 35.4 per cent, falling to 34.9 per cent for the top fifth of higher-earning households.”
The reason that the poor pay more in tax than the rich is that indirect taxes, especially sin-taxes, have been so jacked up under Labour. When only direct taxes are taken into account, the bottom fifth only pay 10.8 percent and the top fifth pay 24.9 percent of their gross income in tax.
Slightly counter-intuitively, as Allister argues, the more socially progressive way to get us out of the fiscal mess that Labour has landed us in is to place the emphasis on cutting spending not raising taxes.
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