It is quite a long time ago now that I made a determined effort to find out exactly how much tax I paid. In all forms, not just Income Tax, Council Tax, National Insurance & VAT, but the contribution I make to ERNIC, fuel duty, business rates, corporation tax every time I go shopping
After much sweating over Blue Books, Red Books & departmental reports I came to the conclusion that one might just as well take the overall average which was then near enough 40%
This should not have been such a big surprise. Many more years ago I made some even more interesting estimates for work about tax incentives for industry which showed, broadly, the same phenomenon: what you gain on the swings you lose on the roundabouts & everybody (government & industry) would be better off with a simpler system with slightly lower rates of tax. A point beloved of politicians on the right
Of course in real life & politics things are not that simple. Time & cash flows make a difference which is not always captured by economic theory
And perception is all. So many people believe that the abolition of the 10p tax means that their tax has doubled overnight, & attempts to explain why this is not so are destined to suffer the same fate as Harold Wilson's Pound in your pocket
Non-doms arguing for continued favourable treatment when it comes to income tax are the only ones currently arguing on the basis of the total they pay in all forms of direct & indirect taxes
What I wonder is, do we all, unwittingly, pay at the same overall rate?
