Happy June 2, 2008! or Tax Freedom Day in the UK

We are free dear Hobbes! We are free!

Well, at least until January 1, 2009.

Free of what? You will ask. Well, according to the Adam Smith Institute up until June 1 of this year, the average UK resident hasn’t been working for him/her and his/her (gosh, this is stupid) family. He hasn’t been working for his employer either. Nope. For the last five months and 1 day you have been working for darling Darling, the cancellor, the Treasury, ultimately, the Government. Your Government.

You should feel lucky, at least we gained 48h –wrong, 24h, since 2008 is a leap year!-, since last year Tax Freedom Day (TFd) fell on 4 June

UKgov takes home more than 40% of national income. Comparing to 2002, we are working now an extra week for the Treasury (TFd was April 24, in 1963). At this pace, by soon will be working over half a year for the taxman.

How does the Adam Smith Institute work out the exact date? You can find much more details here, but essentially:

Tax Freedom Day is calculated by taking the UK’s net national income and calculating how much of that is taken away in taxes. These taxes include not just income tax, but VAT, inheritance tax, stamp duty, car and fuel taxes, excise taxes on alcohol and cigarettes, taxes on companies and employment, and many more.

In pure US debt-junkie style, the Institute points out other two very scary facts:

  • Government spending will reach £600 billion in 2008 – that’s £10,000 for every man, woman and child in the UK, and twice as much as in 1997.
  • If public spending had only grown in line with inflation since 1997, we could have abolished income tax, corporation tax, capital gains tax and inheritance tax, leaving the taxpayer £200 billion better off.

As I normally say, we’ve got the governments we deserve, but a quick look into Tim Harford’s The Undercover Economist will show you how much money can be made selling something as normal as 3G mobile spectrum (?), or any guide on “How to trade on Gold for Dummies” will lead you to the conclusion that Gordon Brown was as useful as Chancellor of the Exchequer as his left eye to a sniper in Basra. Well, you get the picture.

By the way, June 2 is assuming that the Chancellor got his growth forecasts right, which is quite a lot. But hey! eventually we are all sheep, we complain about too much tax charged on our payslips, but we don’t realise that TFd in the USA fell this year on April 24. No need to count, I did the maths for you, it was 39 days ago.

If you think Darling and Co. screw us, think twice, last year Tax Freedom Day fell on July 27 in Sweden and Norway, and August 2 in Israel. And based on the 2008 state budget draft passed by the Israeli cabinet (as everywhere else, the largest in Israel’s history), Tax Freedom Day will be even later in 2008.

And on that note, we end today with a Hebrew proverb, “the more you add, the worse it gets”. Let’s keep it in mind for next year.

.Calvin

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One Response

  1. We do seem to have a lot of tolerance for taxation in the UK. Perhaps the silly buggers that run this island should require a bit more of us and put it to some worthy end for a change, like a proper pension system perhaps, or relentless pursuit of criminals. Anyway I don’t feel like I am getting my £10,000 worth.

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