Posted on 12/23/2006 8:50:47 AM PST by kiriath_jearim
Families are being squeezed harder than ever before by higher taxes, according to figures which lay bare just how much the Government is now taking from households.
The income tax burden has soared to its highest level since records began two decades ago, dramatically eroding the amount of money left in people's pockets, figures released by the Office for National Statistics say.
British households have experienced the biggest increase in taxes across the western world since Labour came to power, the Organisation for Economic Co-operation and Development has revealed.
The result is that hard-working families have even less money left to spend this Christmas.
The double warning comes on the eve of what should be the biggest shopping day of the year, and will strike fear into the hearts of retailers.
The ONS said that taxes on income are now absorbing £23.60 of every £100 earned. This tax level is before other indirect and "stealth" taxes, such as council tax and stamp duty, are taken into account.
The figure shows how the amount taken by the Government has been ratcheted up since 1997. When Labour came to power, the level of taxes on income was at a low of 18.7 per cent. The tax burden rose by 3.1 per cent in the three months to October alone, and has risen by 9.2 per cent since the start of the year – the biggest leap since 1998.
With the Chancellor already having raised a series of indirect taxes – including air passenger duty earlier this month – the effect on households' finances has been severe.
Exacerbating this, some households are having to contend with inflation rates of up to 9 per cent – as shown by research produced for The Daily Telegraph.
The growth in families' disposable incomes – after all taxes, mortgages and inflation have been taken into account – has dropped to a two-year low. It rose by only 0.2 per cent in the third quarter of the year, the ONS said.
The poor figures are the direct effect of previous tax increases, and of fiscal drag, in which the Chancellor fails to raise tax-free allowances at the same rate as wage inflation, experts said.
The OECD highlighted a stark comparison between the experience of British citizens and their counterparts overseas. In most other developed nations taxes are falling.
The Paris-based institution said that since 1997 the tax burden in Britain, which includes business taxes as well as personal ones, has soared. It has calculated that, by 2008, the share of national income being eaten up by taxes under Labour will have increased by 3.8 per cent.
The OECD said that in the wider industrialised world, the tax burden had decreased by 0.3 per cent between the start of 1997 and the end of 2008, based on governments' budget plans. In Germany, usually regarded as a high tax country, taxes have fallen by 2.4 per cent over that period.
Consumer groups and business experts have voiced concern that Britain has gone from being a low-tax economy to a high-tax economy. They fear the country has become less attractive to employers, and warn that high taxes are driving many Britons abroad.
With debt levels at an all time high of near £1,300 billion, households' finances are more pressed than ever. The squeeze has contributed to a record rise in bankruptcies and insolvencies.
The Treasury said the ONS figures did not take into account income savings, shares, and asset disposals. A spokesman said: "As a result of all tax and benefit reforms introduced since 1997, all households will be on average £1,000 a year better off in real terms from April 2007."
George Osborne, the shadow chancellor, said: "Gordon Brown has relentlessly piled taxes on to hard-pressed families. That is why we have the double blow this Christmas of a less competitive economy and falling living standards."
If you sit down and add up all the taxes you pay in most states, the total tax bill exceeds 50%.
ALL governments are tax sucking parasites that will continue to increase their "take" until the population says "Enough!".
Meadow Muffin
Ah, come on. Those hard working, middle class families shouldn't be upset. They are just paying for all those fine, upstanding Muslim immigrants on government aid, housing, etc.!!!
Indeed, "overseas" in the United States I don't think many of we working stiffs are undertaxed. At least I don't think I'm undertaxed.
When I hear a liberal saying he or she thinks we should all be willing to pay more, I always offer him or her the opportunity to write out a check to the federal, state of local tax collector of his or her choice. I instruct him or her to write the check for the exact amount of money that would increase the tax share to the right amount. I say I will furnish the envelope and stamp. So far I have yet to obtain a single check.
So I guess even liberals don't really feel undertaxed.
And that's just the taxes you see. There are taxes you don't see too. And there are costs you pay resulting from the income tax system that are hidden.
All in all, our income tax system absorbs more than 50% of our earnings.
I'm sure Gwyenth Paltrow will find a way to have a nice dinner conversation with her English accountant and figure out a way to avoid paying these taxes.
Amen!! Esp. if you have zero deductions. Our household income is solidly in the mid-five digits, and taxes (state, local, federal, Medicare, etc. etc.) are skimming off 48%. Lord only knows what it is if you factor in gasoline tax, telephone tax, tax on the electric bill, and so on.
'Course, we do live in Ohio.
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