From tomorrow, your hard-earned cash is your own By David Litterick
Daily Telegraph (Filed: 29/05/2004)
Tomorrow is "tax freedom day" - the day you stop working for the Government and start working for yourself.
So far this year, every penny earned by the average British worker has been needed just to pay taxes to the Treasury. From now on, your money is your own. This year's date - May 30 - is three days later than last year and six days later than when Labour came to power in 1997.
Dr Eamonn Butler, the director of the Adam Smith Institute which calculates "Tax Freedom Day" every year, said: "It is astonishing that Gordon Brown has managed to make us all put in six days more work for the Treasury without many people noticing. It is a tribute to his skill at dreaming up new stealth taxes."
The free-market think tank calculates tax freedom day by comparing Mr Brown's Budget predictions of national income against total taxes.
The Chancellor is planning to take £439 billion in taxes and excise duties this year, including VAT, council tax, and income tax. That compares with a national income of £1,057 billion, giving a tax take of 42 per cent.
It means people have to spend 152 days every year working solely to put money in the Government's coffers.
This headline number is just a start, however. Independent commentators claim that Mr Brown has run up a £13 billion "black hole" which will have to be funded by future tax rises. Oliver Letwin, the shadow chancellor, said: "Each household in Britain is already paying on average £5,000 a year more as a result of Gordon Brown's 66 tax rises."
He estimates that, if future tax rises are added in, tax freedom day will fall four days later. The Adam Smith Institute claims that the true position is even worse.
The Government is currently running a deficit of £34.5 billion. If that were added to the calculations, tax freedom day would not fall this year until June 11.
The latest date on which tax freedom day has fallen was June 15 in
1982, after Margaret Thatcher raised taxes to combat the worsening state of the public finances she inherited in 1979. However the burden was then gradually reduced until in 1993 it fell on May 21.Britain's position compares unfavourably with America, where tax cuts from George Bush have brought tax freedom day forward to April 11 - the earliest date in 37 years.
The methodology was prepared by Gabriel Stein, an economist at Lombard Street Research. He said: "People often joke that they spend as much time working for the Government as they do for themselves. Unfortunately, it is getting nearer and nearer to the truth."