This table has just been published by the OECD and shows the "tax wedge" taken from employment earnings for all 34 OECD countries:
The OECD say of this:
Note then that this "wedge" includes employer's national insurance - which most people do not appreciate is paid on their behalf.
The UK is at 32.3%, well down the list.
Of course, that may also be why we have such a high deficit: we are undertaxing high earnings in particular.
But there's no case for saying we're overtaxed, most especially at high rates. That's for sure.
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Given that the list is based on average salary, it doesn’t really tell us anything as a country with a progressive tax system should be low on the list (i.e. low tax on average earnings, high tax for the top 10%).
If it was total employment tax to total personal eanrings, that would be indicative of the tax system.
But the rate for higher earnings is much higher, especially when including Ers NIC. the blended rate is considerably weighted down by our lower taxes on lower earners (a good thing). The respective marginal rates on high earnings need to be compared in isolation to asses where we stand. I’m happy that lower earners have lower tax rates than me, but that doesn’t impact what I pay personally… and you can’t argue that the next pound I earn is under taxed just because the a stage UK citizen pays less than the average German (which isn’t to say that it’s not).
There’s that thing called high pay some enjoy
That’s why they pay more tax
I don’t dispute that. I’m just saying that conclusions about what high earners pay can’t be drawn from that chart.
No, I did extrapolate using other data of which I am aware, but not unreasonably, in my opinion
Then put up the other data! If you’re right then it will show. I’d be interested to see it (a quick look at the top rates around the world on Wikipedia would suggest that our rate of 40/45% excl NIC is on the high side… but I don’t know about the respective NIC equivalents elsewhere. If the data isn’t easily available then it would be an interesting piece of research to compile it. If you’d like help doing so then email me, that’s a genuine offer, as I know it would be time consuming).
Sorry to bang on.. but this post just says ‘High earners are undertaxed in the UK, and here’s some data which relates to something else’.
Just google it
It’s easy to find
I’ll do more research then.
If the relevant data is so easy to find, why not use that to make your point?
Because I have a life?
And doing your research is not in my brief?
But if you already have the evidence to hand, having used it yourself, would it not be far simpler just to put up the link you have?
It seems odd to try to reinforce the strength of your argument by deliberately witholding the support for it.
I have better things to do with life then google for trolls
You make it very hard for me to support what you’re doing, you know.
As I’ve said many times, I am very much in favour of people and companies paying the right amount of tax, and I think we have an awful lot of common ground. But for some reason you keep attacking me.
Do you not want help in getting things reformed?
I do
Therefore stick to the point
And comment less than five times a day
Or less
Or you waste my time
Richard.. I give up! I’ll say my final piece and leave you alone.
You agreed that the conclusion you drew could not be drawn from the data you published.
You then claimed that there is data to support your conclusion, and that it is easily available.
Although you also said that you extrapolated to come to your conclusion.. which would be unecessary if the data itself if there.
It’s not your brief to research for me, but it is your brief to do research, and you are paid to do that. This post, and your dismissive/offensive response to anyone with temerity to point out the obvious flaw, is not ‘research’. It’s the opposite.
Your lack of respect for the people who read this blog is astounding.
I respect people who come to this blog
But not trolls who want to waste my time – which is exactly what you’re doing
You won’t be missed
Maybe — if you believe the figures.
But surely this is only part of the amount taxed?
And consider —
Greece 41.9%…. Italy 47.6%…. is this the amount people are *supposed* to pay in these countries? or the amount they *actually* pay?
I refuse to believe the average Italian actually pays half as much tax again as the average Brit — and if they do, it’s hardly supportive of your argument, is it?
Lies, dam’ lies…….
Go read the OECD report, I suggest
Sorry, Richard — I’ve got to go to work (self-employed) — haven’t got time to wade through that.
Was rather hoping you could let us all have a potted summary…….
;0)
The UK is well down the list based on the average salary of a single person (35.9k) – which for the year in question is just above the 40% band threshold.
The table attached doesn’t support any conclusion that there is “no case for saying we’re overtaxed” or that we are “undertaxing high earnings in particular”
I think we can extrapolate that
You don’t
That’s OK
“Of course, that may also be why we have such a high deficit: we are undertaxing high earnings in particular.”
Or we’re spending too much on the State. Like it or not, this is what the coming elections will be about – just precisely what the state should and shouldn’t do and how to pay for it.
For example, does the local council need to employ ‘Five a day’ advisors and the like? What service should the NHS provide? Does there need to quite so many civil servants – in local and central govt – on salaries (or total packages) worth more than £100K.
Does a PCC really need to employ a deputy on £45K and an office manager on a salary north of £50K or have a chauffeur?
Do we need to spending billions on the planned FRES programme, should the MoD be controlled directly by HMT when it comes to spending?
Are programmes that are ‘nice to have’ like ‘Sure Start’ actually affordable when it comes to the fact that we’re still borrowing hand over fist to finance the spending we ‘want HMG to deliver’?
Should the retirement age be raised even higher? Should pensions actually even be a universal benefit especially for those who have chosen to live abroad? Should child benefit actually be paid to those without children in the counthry?
Ahh. finally, there was an interesting piece on R4 recently with Frank Field and he visted an average pub to gauge what people really thought about the welfare state and the access to benefits (after the JRF released their report on the matter)….
…..even Red Mob voters were demanding change saying that the welfare state is too soft.
Talk of ‘taxing high earners’ even more – that won’t resolve the fundamental questions of how much should the state provide and how should we pay for it.
We clearly do not spend enough
Or we’d have full employment
There is an important category of taxes missed out from the OECD work as far as I can see which is indirect taxes and especially VAT – to the extent that VAT increases the prices of VATable goods and services it creates an additional “tax wedge” in terms of net purchasing power. However, the UK’s VAT rate – even after the ConDem hike to 20% – is relatively low by international standards. Including VAT in the analysis strengthens your argument that UK workers are not overtaxed even further, Richard.
Agreed
The report is only on labour taxes, in fairness
Only the right wing loons argue that we are “over taxed”.
The same people that would like the minimum wage abandoned.
They’re still stuck in a “greed is good” parody of “It’s Groundhog Day”.