Tax Freedom Day has arrived a little later this year as double-dip recession, VAT increases and higher taxes all round added up to the government taking a bigger share of everyone’s income.
The big day passed on May 29, 2012 – 149 days in to 2012 – and marked the moment when earners can officially keep their cash after paying off the government.
Tax Freedom Day in the UK was way after the USA’s, on April 17, and Australia’s on April 4 – but the UK is still well ahead of France, where taxpayers will have to wait to around Bastille Day (July 14).
Tax Freedom Day measures the cash raised raised by the government in taxes, not the what is spent.
The government borrows £1 for every £4 raised in taxes, so if the full cost of government is considered the Cost of Government Day, which falls on June 23.
Last year’s Cost of Government day fell on June 30, meaning that the government’s austerity measures have reduced the cost of government by seven days.
The institute also calculated how much Chancellor George Osborne’s austerity measures affected Tax Freedom Day – and the answer was a disappointing five days slashed off the total taxpayers need to pay.
Institute director Dr Eamonn Butler said: “Tax Freedom Day, which the Adam Smith Institute has been calculating for 25 years, is the plainest way to show what the tax burden really is. That is why the Treasury hates it. They of course want to conceal how much tax we pay, which is why they are so keen on stealth taxes.”
“We put in every tax, including stealth taxes – income tax, national insurance, council tax, excise duties, air passenger taxes, fuel and vehicle taxes and all the rest – and show just how long the average person has to work to pay their share of them all. The stark truth is that this burden costs us all 149 days of hard labour every year. That’s not how long a rich person has to work – it is the time the average person must labour for the tax collectors.”
“In the Middle Ages a serf only had to work four months of the year for the feudal landlord, whereas in modern Britain people have to toil five months for the government’s tax gatherers.”