Tax Freedom Day 2012
For those not familiar with the term, ‘Tax Freedom Day’ is a term used to show how long each year the average UK taxpayer would have to work if they had to hand over everything they earned until all Government spending was paid for. It’s a rough estimate as it includes all taxes such as VAT but still a useful guide to how much of a nation’s wealth has to be handed to the Government.
It’s calculated by The Adam Smith Institute and this year they estimate that if the Government demanded their money first, then from January 1 until May 29 you would have to hand over every penny you earned. Only starting on May 30 would you be able to keep it for yourself. And if the Government couldn’t borrow any money, tax freedom day wouldn’t be until June 23, a 24 day earning to borrowing ‘gap’.
As things are, you worked until January 11 to pay for interest on Government debt, then to January 21 to pay for defence and to January 30 to pay for law and order.
Are things going to get better? Not according to the Adam Smith Institute. They estimate tax freedom day in 2015 will be one day later, on 31 May. The only bright spot seems to be that by 2015 the Government will be borrowing a lot less. The taxation plus borrowing date will be June 6. So in 2015, we’ll be paying more tax but the Government will be borrowing a lot less.
How does the UK compare with other countries? Pity the poor Hungarians, their tax freedom day in 2010 wasn’t until August 6 but be jealous of the Cypriots who celebrated tax freedom day the same year on 13 March. The Americans are doing better than us but have done even better. In 2010, their tax freedom day was April 3. But in 1900 it was as early as January 22!
Oh well, I’d better get back to work. I’ve got three-and-a-half more months working for the Government to go.Talk to Barnes Roffe today