Super-rich are paying less in taxes than their cleaners

Britain’s super-rich are paying less in taxes than their cleaners, according to official figures.

The latest release from the Office for National Statistics shows the poorest ten per cent of households fork out 42 per cent of their income in taxes – including VAT and council tax.

Conversely, the richest ten per cent pay 34.3 per cent – according to analysis by the Equality Trust.

Today’s figures also show that average income for the richest fifth of households is £84,700 – more than 12 times greater than the poorest fifth (£7,200).

Dr. Wanda Wyporska, Executive Director of The Equality Trust, said: “When the super-rich are paying less in taxes than their cleaners, you know something has gone disastrously wrong with our broken, regressive tax system.

“Time after time we see sensible reforms attacked and rejected in favour of tax cuts for billionaires. These do nothing for ordinary people struggling to keep a roof over their head.

“If political parties are serious about representing working people, they need to shift the burden of tax to those with the broadest shoulders. Only then will we see a fairer and more equal society.”

The report also revealed that council tax and VAT hit the lowest earners particularly hard, with the poorest ten per cent of households paying seven per cent of their gross income in council tax, compared to just 1.5 per cent for the richest.

For VAT, the poorest households fork out 12.5 per cent of their gross income – whereas that tax only accounts for five per cent of outgoings for the richest.

Labour’s Shadow Chancellor John McDonnell said: “The Tories promised when they were first elected that they would have balanced the books by 2015, but now they cannot promise to do it by 2020, and instead the past year has seen both borrowing and debt has increased.

“Today’s figures reveal that the national debt has gone up by £123 billion since March last year, and with a Tory Chancellor who won’t rule out raising taxes on low and middle earners, and has no plan to deal with inflation rising ahead of earnings, it is clear the Tories want the rest of us to pay for their mistakes.”

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6 Responses

  1. robin

    The are no sources cited.

    As an article it is a tragedy, more so because it looks essentially correct. But no-one has any way of knowing without doing the fact checking themselves from scratch.

    Sort it out.

  2. Joe

    When I shop for services, food, utilities I pay a fixed monetary price. I do not pay a percentage of my gross income. Why do we think that the rich should be paying a higher percentage VAT rate or a higher percentage council tax? That would of course be ridiculous. We have accepted the notion that income tax should be progressive, but to lump in all these other flat rate taxes results in a totally distorted analysis.

    1. Jonny

      Indirect taxation such as VAT disproportionally disadvantages low earners – it’s an economic model designed to benefit the rich – VAT should be low across the board (or abolished) as should NI with a simple transparent progressive income tax on ALL income (not just employer wages) – many upper pay bracket earners direct money through tax vehicles such as personal service companies and pay as little as 10% tax on earnings of £100k per annum…..they still get free education for their kids and free NHS etc ……

      1. Ed

        Your argument falls down on VAT as you suggest it be “low across the board” – this wouldn’t have any effect other than to overall reduce the tax take – where VAT falls can be manipulated but that would be via the rating or not of various goods (as now happens). Any tax on consumption will always hit those more who spend most – so if I spend all my income on goods subject to VAT whilst my colleague with the same earnings saves 20% of his income, then the impact of VAT is higher on me. So since lower earners are far less likely to save then yes they will, subject to which goods are rated for VAT, pay a larger % of their income on that tax. However, since savers contribute to society and the economy also, there is nothing inherently wrong with this model.

        We do have a progressive tax on all income – your issue appears to be instead with the small number of people using PSCs to reduce their tax bill. Here you are both wrong in terms of the tax payable on £100,000 per annum and on the fact that this is only the preserve of those at that income level. There are people using PSCs at less than that and the composite rate of corporation tax and income tax would even at the most efficient deliver more than 10% in total tax.

  3. debra

    no wonder the country and the poor in this country are in the state they are in with selfish people like you lot in it. What you fail to forget is that we have the 5th strongest economy in the world and should be able to look after the old and most vulnerable members of society. It is a absolute disgrace in 21st century Britain that over 300,000 people including working families used a food bank last year, and now the elderly are being expected to provide for their own care. The elderly have already done their work and paid their taxes and paid into a system they thought would look after them from ‘the cradle to the grave’. What you also need to remember is old age and decline comes to us all if we are lucky and you may need help and support, so I hope you are ready to sell your home and get your dinner if you are lucky from a food bank. You ought to hang your heads in shame and show some humility and respect for someone other than yourselves.

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