Thursday, April 07, 2005

Taxation truths

Channel 4 News have dug into another of those Tory mantras about '66 tax rises since 1997.'

In summary, the overall effect of tax rises and tax cuts means that the overall tax take, as part of GDP has jumped from 34.8% in 1996/8 to a whopping 35.6% in 2003/4. They've risen by a whole 0.8%.

The Institute of Fiscal Studies actually reckons that there have been 157 tax rises since 1997, but 215 cuts over the same period. Most of the changes are tiny and of major interest only to tax lawyers.

Incidentally, the IFS has also produced a report which suggests that while average incomes have dropped by 0.2% - the first decline in over a decade - there has been a slight narrowing of the inequality gap.

'Incomes of the richest fifth of households fell by around 1% in 2003/4, those of the poorest fifth rose by around 1%'
Hardly earth-shattering in its redistribution, but a start. It remains to be seen if this is a sustained change.

They also state that:

Pensioner poverty continues to fall dramatically... by a tenth in the single year 2002/3 to 2003/4 and has fallen by over a quarter since 1998/99'

So, things ARE getting better.

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