David Whiscombe examines the figures behind a recent study.
It’s reported that a new study by the National Centre for Social Research reveals that the proportion of Britons who would favour tax increases to fund increased public spending has doubled since 2010, with 60% now in favour.
As always, it’s worth considering the underlying figures.
Let’s assume that the poll was of adults. There are about 50 million adults in the UK: so 60% is 30 million. Coincidentally, that’s also roughly the same number of people who pay some level of Income Tax. It’s probably reasonable to assume that the great majority of the 20 million who don’t pay Income Tax would have no objection to its increasing. That would place around 10 million of the 30 million who would vote for an increase as being taxpayers. Coincidentally or not, that roughly corresponds to the number of taxpayers whose average tax rate is less than 6%.
The people who as a group might be less likely to vote for an increase in Income Tax might be the 3% of taxpayers who, between them, account for over 40% of the country’s Income Tax. We’ll say that again: 40% of the Income Tax in the UK is paid by about 3% of the taxpaying population. And 25% is paid by well under 1% of the taxpaying population.
Some people think that balancing such a large proportion of the country’s finances on an inverted pyramid with such a narrow base does not make for stability and that what might sensibly be looked for is not an increase in rates but a widening of the base – which of course runs contrary to the policy of every government for the past several decades.
We don’t have a view: but it’s certainly a debate worth having.
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