Tax rise on middle class ‘highest in the West’
Middle-class families are paying an extra £1,250 a year after suffering the sharpest rise in their tax bill of any leading Western country over the past five years, figures show.
In a major blow for Alistair Darling hours ahead of his first Budget, comprehensive research has shown that the middle classes have shouldered one of the world’s biggest increases in their tax since 2002.
During the same period the average tax burden in most countries actually declined, according to the report from the Organisation for Economic Cooperation and Development [OECD].
But British families with two children and one earner on the average wage saw their tax bill increase by some £1,243 between 2002 and 2007, based on the current median annual wage of £19,856.
The Chancellor is today expected to raise the tax burden for millions more families. Measures introduced by Gordon Brown last year, but set to be confirmed today and introduced next month, are due to raise the tax bill for 5.3 million of Britain’s poorest households.
C’mon, let’s be fair. This is, quite simply, a way of motivating people to do better; become more productive and the like. Stiff upper lip, mates. It’s only just begun.
George Osborne, the shadow chancellor, said: “Here is proof that while the rest of the world is successfully reducing the burden on families, Alistair Darling and Gordon Brown are doing the exact opposite.”
The OECD said that the proportion of salary paid by a typical family in taxes and National Insurance contributions increased from 25.8 per cent to 28.3 per cent between 2002 and 2007. The 2.5 percentage point rise is in stark contrast to most other developed countries. In the United States, tax bills dropped by a full two percentage points, while even in Germany, renowned for its high taxes, it dropped 0.1 percentage points.
As The Daily Telegraph disclosed on Tuesday, Mr Darling will delay the 2p rise in fuel duty for six months.
The Chancellor is expected to say that while he takes environmental considerations seriously, with oil now $107 a barrel and pump prices having risen by 20 per cent in the past year, he believes motorists are paying enough.
A source said: “The decision has been taken because this is not a time to be taking that sort of money out of the economy.”
Matthew Elliott, of the TaxPayers’ Alliance, said: “Tax rises have damaged consumer confidence and reduced families’ security and savings – everyone else has realised that this is a harmful policy.”
A Treasury spokesman said: “The report shows that the UK is a relatively lightly taxed economy. The total UK tax burden continues to be well below both the OECD and G7 averages.”
• Unleaded petrol yesterday topped £5 [US$10.06, ed.] a gallon at the Cherwell Valley services on the M40, said the AA.
Via The Telegraph