Alex Cobham of the Tax Justice Network noted an odd claim by the government on Wednesday. They said in an amendment to a Labour motion tabled in parliament that
“the UK is collecting more tax than ever before.”
Alex set out to check and as he said (and I quote with permission):
I've been quickly through the Office of Budget Responsibility and Office of National Statistics data (and had some fantastic support from the latter, for which many thanks — no blame attaches, of course), and I can't stand this up. Here's a graph, of total (central government) tax receipts, with and without National Insurance Contributions (which OBR do include in tax). This leaves out local government tax — business rates and council tax.
Neither in the most recent period, nor across the coalition government's term to date, can I see any pattern that could support the statement. In each case, tax receipts are lower in the last one year and the last four years are lower than most of the preceding thirteen. (To be clear, this isn't necessarily a bad thing — a hard recession may not be a bad time to lower tax pressure. I'm just looking at the government claim here.)
Surely such a basic error wouldn't be made in a parliamentary amendment, so there must be some other explanation. The only thing I can think of is that the government are referring to tax receipts in current, cash terms — but that would make no sense at all for a comparison over time, in fact it would be seriously misleading. So maybe there's something I'm missing.
No Alex, you're not missing anything. They're just being seriously misleading. They are referring to cash. And that is a wholly inappropriate claim. And we are not paying more tax then ever.
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Ed note: comment deleted because false email address supplied
The best compliment you could have paid me, just shows your twisted lies. I take that as an agreement that you are a hypocrite then.
As a matter of fact your email is always rejected, filling my inbox with spam
Go away and pick on someone your own slight size.
As I mentioned in a comment some while ago, Richard, from my observations over the course of this parliament, compared to previous post war governments there’s little doubt that the tendency to misuse statistics and/or simply lie has reached new levels since 2010. However, that’s only one dimension of the Tories race to the bottom in being economical with the truth. Note also that almost any minister or spokesperson who appears in the media does it, as Channel 4 News’s Fact Check frequently exposes. And a recent Private Eye had one of their ‘number crunching’ columns that contained some cracking illustrations of Cameron’s habit of over exaggerating/lying about the achievements of this government (eg, saying nearly half for 40%, etc).
On one level this can seem funny, but the sad thing is that over time it drags other political parties and politicians down the same path of misrepresentation and falsehood in the pursuit of power, and thus further undermines an already discredited political system. Unfortunately, with the Tories reliance on a ex US election adviser – where the misuse of information to smear political opponents is commonplace – we can only expect the race to the gutter to gain even more pace.
It would be interesting to extend that series back in time to the post war consensus period.
It is also interesting to ask who is “we” in the context of the title of your post.
“we” is the UK
Yes, that is why it is a question in my mind. We are not “all in it together” and I would really like to know how it breaks down. I would like to know when the top 10%, top 1% and top 0.1% were paying the “most tax ever”. I think there may well be significant differences between their experience and mine. Might be wrong, of course
Tories and Lib Dems were peddling this on last night’s Question Time. Looking at the figures you have put on previous blogs their claims are bare faced lies.
At least I re-learnt why I don’t watch that particular programme anymore.
On Question Time last night a ‘businessman’ stated that he felt he paid too much tax. That was it – no qualification given and none asked for by Dumb-bleby (he lost his edge a long time ago). This was in the context of a discussion about HSBC. Maybe if HSBC and others were paying their bit, their might be a reduction in tax for smaller businesses or a reduction in VAT? This was not explored.
Most of the audience come across as wanting to be clever because this is their 15 mins of fame to emulate Jeremy Paxman.
Mark C -it was a couple of years ago that the ‘veil was lifted’ and I realized that the BBC was no more than a ‘yes person’ for the prevailing economic myths. No-one was asking the real questions and the dumbing-down was palpable. It is better to look at Al Jazeera/RT (though they have agendas, of course) and follow blogs (like this) that encourage real thinking.
Simon
Absolutely – couldn’t agree with you more on that one.
Consider that some of the most searching examinations of neo-lib capitalism I’ve seen have come from America in the form of films and documentaries like:
The Flaw
Inside Job
Inequality for All
Capitalism – A Love Affair
Enron – the smartest guys in the room.
And also consider the book ‘Days of Destruction; Days of Revolt by Chris Hedges and Jo Sacco. I would have thought that Americans could never hold such anti-market sentiments until I read this book and also look at the Trillion Dollar Meltdown by Charles Morris.
What has happened in a America is really important to us in the UK because we are next. That’s if we’ve not been had already.
Why are you surprised that this government is seriously misleading in its use of statistics?
No
Mark Twain said it all!
Surely there are at least three ways you can measure how much tax we are paying:
* tax collected
* tax collected, adjusted for inflation
* tax as a percentage of GDP
We need the politicians to clarify which of those measures they are using (no doubt the first, which is rather less than ideal).
But isn’t GDP adjusted for inflation? If so, the use of tax/GDP ratio is as meaningless as using a simple cash comparison.
It’s quite possible that more tax is being collected (in real terms) than ever before.
GDP is adjusted for inflation – albeit imperfectly due to its nature, in my view
GDP to tax is inflation adjusted by definition. Both are in current terms
More tax is being collected in tax terms. As a current function that is irrelevant
But with debt real cash value is significant: cash values can change over time because of inflation / deflation
” GDP to tax is inflation adjusted by definition. Both are in current terms ”
Quite – both are inflation adjusted so if GDP grows the tax take in real terms grows providing, of course, that the tax/GDP ratio remains more or less constant.
It’s not quite as straightforward, therefore, as using the Tax/GDP ratio. That said, I suspect 2007-08 and possibly 2008-09 edge out 2013-14. Perhaps the government knows something we don’t about 2014-15.
Clearly, politicians these days feel comfortable in blatantly treating the public like mushroom (kept in the dark and fed on…..). The fact that our culture and anti-intellectual climate permits this is deeply worrying (there lies the road to fascism).
This is good news. Since the tax gap by your own figures is constant in £s, then as GDP increases, the tax gap is falling! Excellent work Richard.
In som3 key areas. e.g. large company corproation tax it is indisputably falling because of cuts inntax rates, not changes in behaviour