Wealthy Do Not Pay Most Tax in the UK
June 16, 2014 Taxation in UK
LONDON – Individuals with low-incomes in the UK pay far more taxes than wealthy individuals, however, due to a lack of information on the subject, public perception of the situation does not match reality.
UK taxpayers severally underestimate the amount of tax paid by individuals with low incomes, while overestimating the amount of taxes paid by the wealthy, seriously hindering any progress that the country can make towards greater equality, according to the results of research outlined in a new report issued late last week by the UK based non-government organization Equality Trust.
The conclusions drawn in the research were based on the results of a survey of UK taxpayers and their personal opinions on how much tax is paid by individuals in various income brackets.
According to the experts of Equality Trust, on average the respondents to the survey believed that an individual in the lowest 10 percent income bracket paid approximately 23.9 percent of their income as taxes, while a person in the highest 10 percent would pay 35.9 percent of their income out as tax.
However, in reality, individuals in the lowest bracket faced a total tax rate of 42.92 percent of their income, while the highest earners faced a lower tax obligation of only 35.9 percent of their income.
The wide discrepancy between the real tax obligation and the perceived tax obligation was attributed to a lack of information and a skewing of information by the media and politicians, who often focus on headline tax rates, and choose to ignore the full impact of other common taxes such as VAT and national insurance contributions.
The respondents to the survey were also asked for their opinions on how to make the national tax system fairer and more equal, and it was suggested that the tax system should be changed to ensure that low-income individuals pa a maximum of 15 percent of their income as tax, while the wealthy should pay up to 39 percent.