Taxpayers are paying the government more money now than they have paid in the past 50 years, according to a new study.
Tax has reached a 49-year high, says the Taxpayer Alliance, a lobby group that monitors tax and government spending.
In 2018, taxes will make up 34.3% of the country’s gross domestic product (GDP), the highest percentage since 1969-70 when taxes reached 35% of GDP.
According to the research, the government will raise £776 billion in revenues, which amounts to around £28,000 for every household – but the money includes tax from businesses and other sources, not just private individuals.
The money goes towards government spending, which will total £813 billion, leaving a 337 billion deficit.
Paying for extra NHS spending
Some of the Whitehall revenue comes from dividends, interest and other miscellaneous income, but most comes from taxes.
The Taxpayer Alliance report also explained that raising taxes was not the only way for the government to increase revenue to fund the promised spending increase of £20 billion for the National Health Service.
Other suggestions for raising extra taxes to pay for increased NHS spending include raising income tax and/or national insurance; taxing chocolate; raising more from fuel duty; an inheritance tax hike or putting up council tax and business rates to contribute towards social care.
Evidence shows, says the alliance, that reducing taxes can lead to more money coming in.
Poor families hit harder
For instance, corporation tax receipts have increased by 25% despite the tax rate reducing from 28% in 2010 to 19% in 2013, while top rate taxpayers pay 37% more even though their tax rate dropped from 50% to 45% in 2013.
John O’Connell, chief executive of the Taxpayer Alliance said: “Families and businesses are being squeezed under the highest tax burden in nearly 50 years. The gradual increase of taxation and the introduction of new taxes have hit poorer families the hardest, leaving them with less and less at the end of the month to pay for life’s necessities.
The funding models for social care and the NHS need real reform, not ever higher taxes. Instead of taking even more money away from families and businesses, the government should consider cutting taxes, or reducing spending in other areas.”