Sales tax – VAT burden on low earners
Officials statistics show the poorest 10 per cent of households in the UK pay a greater proportion of their income in tax than the richest 10 per cent. The lowest tenth of earners pay an average of 42 per cent of their income in the form of income tax, national insurance, VAT and council tax. In contrast, the richest 10 per cent see around a third (34.4 per cent) of their earnings go to the taxman. The analysis was conducted by The Equality Trust.
Council tax and VAT were found to hit the poorest households particularly hard. Low earners pay an average of seven per cent of their income in council tax while the wealthiest households pay just 1.5 per cent.
A similar trend applies to VAT, on which the poor pay 12.5 per cent of their income while the rich pay five per cent.
Dr. Wanda Wyporska, Executive Director of The Equality Trust, said: “When the super-rich are paying less in taxes than their cleaners, you know something has gone disastrously wrong with our broken, regressive tax system.
“Time after time we see sensible reforms attacked and rejected in favour of tax cuts for billionaires. These do nothing for ordinary people struggling to keep a roof over their head.
“If political parties are serious about representing working people, they need to shift the burden of tax to those with the broadest shoulders. Only then will we see a fairer and more equal society.”