UK Tax Freedom Day - 31st May 2005
Today, May 31st 2005, marks a special day on the calendar - it is Tax Freedom Day.
Tax Freedom Day is the theoretical point during the year when you actually start working for yourself, rather than just lining the pockets of the taxman.
The bad news is that the continued rise in taxes means Tax Freedom Day this year has fallen three days later than in 2004. So we get three days more of the year that we have to work for the Government, rather than for ourselves.
Or to put it another way, it means that for 152 days of the year, every penny earned by the average Brit is taken by the Government.
Comparison with other countries
In the US the tax burden on the average citizen is generally lower than it is in the UK.
Recent tax cuts there mean workers enjoyed their Tax Freedom Day on April 11, the earliest for 37 years.
However, in the Euro zone earners will not stop working for their governments until June 28.
In Denmark and Sweden taxpayers have to work until the end of July.
UK tax rises under Labour
Gordon Brown may have kept their promise not to increase income tax, but other taxes stealth taxes have come into play:
- 1997 - 10 tax rises equivalent to a 4.7p rise on the basic rate of tax.
- 1998 - 14 tax rises equivalent of 2.6p on basic rate tax.
- 1999 - 16 tax rises equivalent of 2.3p on the basic rate.
- 2000 - 4 tax rises equivalent of 0.3p on the basic rate.
- 2001 - no tax rises - it was a budget year
- 2002 - 9 tax rises equivalent to 3p on the basic rate.
- 2003 - 6 tax rises equivalent to a 0.1p to the basic rate.
- 2004 - 6 tax rises equivalent of 0.2p to the basic rate.
- Council taxes have risen every year since Labour came to power, equivalent to 3.3p on the basic rate.
The cost of Labour's stealth taxes over the past eight years is the equivalent of 16.5p on the basic rate of income tax.
It remains to be seen what Labour will do in its third term, but many experts, including the heavyweight Institute of Fiscal Studies, have already said that taxes will have to rise by £11bn in this next Parliament. For the average working couple, that would mean a tax increase of around 3p in the pound, or £1,000 a year.
Sources: