‘The Standard’s Anthony Hilton considers whether tax policy corresponds with the idea of “intergenerational fairness.” He notes that the present standard rate of income tax is 20p in the pound, whereas back in 1975 it was 35p. The top rate of tax today is 45p in the pound whereas in 1975 it was 75p. He concludes that the rate of income tax paid by a young person today – including the additional “tax” of student loan repayments – is still significantly less than the rate of income tax their parents paid.
Source: Evening Standard’
In 1976 a graduate-entry Tax Inspector started on £2,708.20 a year and took home £154.01 a month (or at least this one did and yes, those figures are indelibly etched on a chap’s mind!). Adjust for inflation, and nowadays a chap earning £27,082 would take home (before student loan repayment) something like £1,800 a month – making him around 17% better off than the earlier generation.
On the same note, on “unaffordable” housing costs, that same chap would find that the house for which he paid £7,300 in 1976 with a mortgage costing £75.52 a month (at 12% interest!) would now sell for perhaps £150,000 with a mortgage costing around £750 a month (at around 4% interest). So (in some areas of the country at least) young people, even after taking into account higher house prices and student debt, are not significantly harder-pressed than were their parents. So stop whingeing, kids.
