Taxpayers worked 149 days in 2019 just to earn enough to pay their taxes – but from May 30 onwards, all the money they earn belongs to them.
This was the latest date Tax Freedom Day has fallen in the year since 1995, says financial think-tank the Adam Smith Institute.
Every year, the institute crunches the numbers to calculate Tax Freedom Day.
This year, taxpayers will hand over £734.1 billion to the Treasury, which amounts to 40.94% of national income.
Attack the tax burden
Notably, this year’s Tax Freedom Day in Britain is moving in the opposite direction to the USA, where taxpayers paid their dues by April 16 – three days earlier than April 19 last year.
The institute is calling on the candidates for Tory leadership to reduce the tax burden backed by Tory grandees Sir John Redwood, Steve Baker and Priti Patel, who all argue the party needs leadership that will ‘radically attack the tax burden’.
Cost of Government Day was also calculated by the think-tank for June 18, which is when government spending balances against national net income.
At 20 days, the gap is narrowing, although the money borrowed by the government across the gap must be repaid from taxes.
Three tax changes
The institute is also suggesting the government should make three tax changes:
- Take the poorest people out of the tax net by boosting the take home pay of workers on the minimum wage by raising the national insurance threshold
- Abolish stamp duty
- Cut corporation tax to at least 12.5% to promote job creation and wage growth
Dr Eamonn Butler, founder and director of the Adam Smith Institute, said: “If we were forced to spend 40% of our time working for the government, people would regard it as the most tyrannical slavery. But that is exactly what people in Britain must do.
“Taxes of 40% make working for a living pretty pointless. That’s why economists are clear that tax takes over 15% damage economic growth. With less growth, there is less money to fund the essential services that are really needed.”