Thoughts on politics and life from a liberal perspective

Friday 18 January 2013

Coalition tax rates are far more progressive than under Labour

They say a picture is worth a thousand words.

Well:



This is the difference in income tax that people are paying in the current tax year versus what they paid under the last year of Labour government. When let's not forget they had had 13 years to align the tax rates in any way they wished with a large majority in parliament.

We can see that someone earning £10,000 is paying almost 30% less tax now whilst those earning the highest amounts (£500,000+) are paying well over 20% more. Oh, and that line above seems to me to be the dictionary definition of "progressive". It goes up progressively.

Worth remembering this next time Labour are banging on about how unfair the coalition is being to the poorest people.


Hattip to Len Gates and Carl Minns for the original data.

9 comments:

Alex Wilcock said...
This comment has been removed by the author.
Alex Wilcock said...

Excellent graph!

For added impact at a glance, you might consider:

Making the zero line much clearer - a thick black or red line, say;

Adding a couple of simple summary labels in big letters under the small figures at the bottom x-axis. "POOR" and "RICH", say;

Adding a couple of simple summary labels in big letters to top and bottom the y-axis at the side. "TAX CUT" and "TAX RISE", say.

Tony Bovaird said...

Once you take account of the large rise in prices and the large cut in benefits, this line will look much less attractive. And it is likely to show that ALL groups are now significantly worse off from the changes to the tax/benefits package under the coalition. Can you show these figures as well? Using real terms analysis is now standard, after all. And focusing on the tax/benefits package instead of individual parts of it has been the war cry of IDS for a decade

Mark Thompson said...

"Once you take account of the large rise in prices and the large cut in benefits, this line will look much less attractive."

Why? The line will be exactly the same. It measures income tax rates, not any of those other things.

I don't have the figures you refer to but feel free to find them and post them in the comments here.

sanbikinoraion said...

The "poorest" (your choice of word) don't pay income tax, because they don't have a job.

Adam said...

A little unfair. 2013/14 and beyond won't look so good at the top end as the top rate falls to (a-still-higher-than-Labour) 45p.

Lee said...

But, Adam, the poorest will pay far less, again, than they are now so the line will keep its shape.

And wouldn't it be interesting to also include in the graph tax on private pensions, capital gain tax, new top-rate stamp duty, new tax on private jets etc etc?

Unknown said...

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Unknown said...

We don't have heaps of different pointless payroll 2013 tax brackets.We don't have lots of special tax breaks for special interest groups!!!. Good tax rebates for donations to charities. Company tax is 28% and hopefully lowered to 25% soon. A basic capital gains tax of a simple flat rate would be a good addition