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Really? You may pay your taxes but that doesn’t always mean you are contributing to the national coffers. You may be a “burden on the State” to use an unattractive & emotive term.
Bear in mind that some 60% of UK households receive more ££ in benefits & public services than the taxes they pay. They are the “net tax consumers”, and supported by the top 40% of households who are the “net tax contributors” and by no means the filthy rich.
The table below sets this out by using averages:
(Sources: ONS Statistics for 2009/10, BBC, PWC, IFS. If you want to examine more closely the various definitions & formulae used in the above table, look here. )
Surprised by these figures? Is your household a net tax contributor or consumer? Think about it next time you say I do my bit but others should do more. We are certainly not all in this tax thing together.
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Art Li's Mumblings 
Hmmm. I am not sure this view of things captures the whole story. The distinction between benefits and pre-tax income may be spurious because both are allocations consented to by the electorate.
In other words, an alternative view of these figures would look at gross incomes received (without distinguishing between the source) and the income tax paid.
Thank you for taking the time to comment. I believe the disposable incomes shown are post tax & NI, and nominal value of services received are counted as well as actual state benefits. I do not understand what you meant by “… look at gross incomes received (without distinguishing between the source) and the income tax paid”. Between what sources? Sorry I may be thick & missed an obvious point.
One should always remember that high incomes take money out of circulation. Low incomes put money into circulation. It is only right that high incomes get taxed at high rates and redistributed to low income people. The more money kept in circulation the better off we all become.
Thank you for taking the time to comment. The graph shows that is indeed the case, higher income earners are taxed at a higher rate, and re-distribution takes place. I don’t have an issue with that, nor with what you said. The point of my post is just that some people forget they are net tax consumers.
With reference to the comment made by Groping, if I have ‘high income’ then to the extent I do not spend I presumably will save (unless, of course I keep my surplus cash under the mattress). If I save I am allowing my surplus to be used either in the form of investment in companies/businesses or by deposit (direct or indirect) with banks, in which case my surplus in some form of circulation within the economy. The contrast between low income being in ciculation and not low income not being in circulation (albeit in a form that is different from direct spending on goods and services) is a distinction that should not be too readily accepted, a too simple distinction. Saving is important to the well being of all, low income and not low income. The conclusion reached by Groping is rather touching but far too simplistic.
It’s Keynes’s conclusion, not mine.
Hoarding money. (saving) has very little to do with the amount that banks lend out. Banks will lend money anyway if it is profitable to do so. This is because banks have the power to create money.
Saving is the equivalent of keeping your money under the mattress. It is money taken out of circulation. It is incorrect to believe that banks rely on savings to make loans. They don’t.
One more point. If money saved and then put into circulation via the banks transforms earnings into debt. So instead of individuals and firms earning their way through life they instead have to borrow their way. This is what has happened in the UK over the last 30 years – people have had to borrow instead of earn to pay their way. The UK economy is is deep doo-dah as a consequence.
It is better to tax the surpluses earned by the highest earners and to re-distribute these surpluses to low earners. This way the money stays in circulation without the low income individuals and firms going into debt.
The first sentence should have read “If money saved was put into circulation via the banks then individuals and firms would need to borrow to pay their way instead of earning their way through life.”
The discussion has ignored the question of incentive. High earners will question at some point whether working is worth it, since their efforts will [largely] be taxed away and they’ll see the money go to those who don’t work.
It’s a proven trend that high taxes lead to avoidance at best, evasion at worst. The UK’s introduction of a 50% top rate caused the number paying the top rate to fall by 16,000 costing the Treasury an estimated £7,000,000,000
To ignore human nature in this discussion is to present but a fraction of the picture.
@Peter Hearn
Isn’t this behavioural phenomenon precisely what has happened at the lower end? Wages are so low that millions have decided to languish on benefits or otherwise have withdrawn their labour as a consequence? Human nature, if it exists, must be universal and so the same logic you apply to incentives at the top end must also apply at the lower end of the income scale.
The estimated number of people paying the 50% income tax rate fell FROM 16,000 TO 6,000, a fall of 10,000, not 16,000 as you say in your post.
I am not sure that a defence of “Taxes are too high, m’lud” would be a good defence against a charge of criminal tax evasion.
@Peter Hearn & UxbridgeGraduate. That Telegraph article about the rich fleeing the UK due to 50% tax rate was actually based on a story from a Tory MP using HMRC’s “projected” figures; in other words, no one knows and will not know until actual figures are published around April 2013.