![]() ![]() Spending, and with it taxation, could be cut if the Government used our resources responsibly on the things that matter. If Boris Johnson, having won his confidence vote, wishes to confirm and secure his position, he could scarcely do better than have each government department set out what it spends money on, and ascertaining which of those are priorities and which are fripperies that could be dispensed with. Some of this is essential, in that it is necessary for areas such as defence and justice to be provided collectively, but quite a deal of current spending goes on things of very dubious necessity. Taxation limits our freedom, in the sense that it has the state allocating our resources instead of us allocating them ourselves. Already the idea is being floated for a ‘tyre tax’, advocated, of course, on ‘health grounds’ to obscure its real purpose, which is to raise from electric vehicles the tax it will not be raising from fuel. Their priority will not be to cut spending, but to make good the shortfall by raising new taxes elsewhere. It is not difficult to guess how the Treasury will respond to the diminishing revenue from the duty on petrol and diesel as people switch to electric vehicles. Most breathtaking of all are the duties on alcohol and fuel, where the duty is added and is then subject to VAT, meaning we are literally taxed for paying tax. They arise when we buy airline tickets, insurance policies and, indeed, on most of our purchases. Some of the taxes we pay are not evident to many of us – these are the so-called stealth taxes. It has increased National Insurance for both the employee contribution and for that paid by the employer, which would otherwise be available for wage increases. It has hoovered up extra taxes from us by freezing the tax thresholds, so more of us are sucked into higher tax brackets by inflation. Its emphasis seems to concentrate entirely on raising revenues rather than on curbing its outgoings. To cut taxes you have to cut spending, something the current Treasury seems incapable of doing. It either occurred earlier or stayed the same for ten consecutive years. Under Margaret Thatcher there was a whole decade in which Tax Freedom Day did not come later. Its climb seems remorseless, but it was not always so. The bad news is that this year it falls on June 8, the furthest into the year it has been for four decades, and a whole week later than it was last year.įor some years it has occurred in mid to late May, but now it has extended all the way into early June. We calculate what percentage of our income the Treasury takes in tax, and express that as a percentage of the year. It marks the day when we start earning for ourselves instead of for the government. Tax Freedom Day is usually a cause for celebration, but not this year. Under Thatcher TFD fell at the same time – or earlier – for 10 years in a row.The Treasury's instinct always seems to be to levy new tax, not cut spending.This year's Tax Freedom Day is the latest it's been for four decades. ![]()
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