Sunday - March 19, 2006

The Taxman

In 1966, George Harrison of the Beatles (R.I.P.) got completely fed up with the high tax rates in Britain and penned a great song, slamming the British tax system. It’s a good thing George has passed away or else the recent tax rates in Jolly Ol’ England would require an entire album from the Fab Four ....

Let me tell you how it will be;
There’s one for you, nineteen for me.
‘Cause I’m the taxman,
Yeah, I’m the taxman.

Should five per cent appear too small,
Be thankful I don’t take it all.
‘Cause I’m the taxman,
Yeah, I’m the taxman.

(if you drive a car, car;) - I’ll tax the street;
(if you try to sit, sit;) - I’ll tax your seat;
(if you get too cold, cold;) - I’ll tax the heat;
(if you take a walk, walk;) - I’ll tax your feet.

Taxman!

‘Cause I’m the taxman,
Yeah, I’m the taxman.

And you’re working for no one but me. 

Taxes Hit All-Time High
_{March 19, 2006}

(LONDON TIMES)

Gordon Brown is about to raise Britain’s tax burden to its highest-ever level, raking in nearly £1m a minute. An analysis by the accountants Ernst & Young, based on the Treasury’s own figures, shows the chancellor will match the record high for the tax burden this year and rise above it next year. That means it will be higher than in the 1970s under Denis Healey, when the top rate of income tax was 83%, and the early 1980s, when it was 60%.

Brown will unveil his 10th budget on Wednesday, which Treasury sources say will be an exercise in “consolidation”. The Ernst & Young analysis shows that the tax burden excluding North Sea oil revenues, the best measure of the load faced by families and businesses, will be 37.6% of gross domestic product this year, close to the 37.7% peak reached in the early 1980s. Next year it will reach 37.8%, before rising to 38.1%.

“It’s an all-time high and we’re entering uncharted waters,” said Peter Spencer, economic adviser to the Ernst & Young Item Club, a forecasting group. “We know higher taxes help explain what is happening on Britain’s high streets.” Treasury figures show tax revenues will total £490 billion this year, up from £271 billion when Brown took office. The £219 billion rise is equivalent to £9,000 for every household in Britain.

Under Brown the number of people paying higher rate tax has risen from just over 2m to 3.5m, according to Office for National Statistics data. By the end of this parliament it will have risen to 4m, experts say. “If he stays at the Treasury, he’ll have doubled the number of higher rate taxpayers,” said Mike Warburton of Grant Thornton, the accountants. The total number of income tax payers has risen by 3.5m to 29.2m since 1997, outstripping the rise in the number of people in jobs. The number of estates subject to inheritance tax has also risen from 15,000 to 35,000 a year.

“After nine years of Gordon Brown and 10 budgets this will be his legacy, the highest tax burden ever,” said George Osborne, shadow chancellor. Calculations by Patrick Minford, of Cardiff Business School, show that — including Vat, excise duties, National Insurance and income tax — a basic rate taxpayer pays £48.50 in tax on every £100 earned. Among higher rate taxpayers the figure is £57.10. “People are starting to wake up to the fact Britain is a high tax country,” said Matthew Elliott, chief executive of the Taxpayers’ Alliance.

Businesses are also facing higher taxes. Newly released official figures show the corporation tax bill of Britain’s small companies has more than doubled in five years, rising from £4.4 billion to an estimated £9.5 billion. “The thing I hear from all quarters is that it is not just that they’re taking it off you, it’s that when they do they haven’t spent it wisely,” said Sir Digby Jones, CBI director-general.

The poor performance of the National Health Service, despite tens of billions of extra funding, is in the spotlight, with hospitals cutting staff and cancelling operations because of financial deficits. The Paris-based Organisation for Economic Co-operation and Development, in its latest survey of Britain’s economy, said improvements in public services were proving “slow to come” despite the big injection of extra spending.

A Tory party analysis suggests government debt, including public sector pension liabilities, is more than £1,500 billion, or 127% of GDP, compared with the £442 billion, or less than 40% of GDP, claimed by ministers.

Posted by The Skipper     on 03/19/2006 at 03:46 PM   
Filed Under: • Economics • EUro-peons •  
• Comments (15) • Trackbacks(0)  Permalink •  

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Not that very many people ever read this far down, but this blog was the creation of Allan Kelly and his friend Vilmar. Vilmar moved on to his own blog some time ago, and Allan ran this place alone until his sudden and unexpected death partway through 2006. We all miss him. A lot. Even though he is gone this site will always still be more than a little bit his. We who are left to carry on the BMEWS tradition owe him a great debt of gratitude, and we hope to be able to pay that back by following his last advice to us all:

1. Keep a firm grasp of Right and Wrong
2. Stay involved with government on every level and don't let those bastards get away with a thing
3. Use every legal means to defend yourself in the event of real internal trouble, and, most importantly:
4. Keep talking to each other, whether here or elsewhere

It's been a long strange trip without you Skipper, but thanks for pointing us in the right direction and giving us a swift kick in the behind to get us going. Keep lookin' down on us, will ya? Thanks.

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