According to the IFS calculator, almost 12 millon people earn less than £12,500 a year, which means they don’t pay any income tax. That’s good news for them, at least in the short term. But it has consequences
There was a horribly long pause, during which I gazed desperately around for inspiration, and then the tutor said wearily: ‘Three letters.’
And then, after another interminable pause, he spelled out, perhaps a bit too gleefully: ‘T ... A ... X.’
He was exaggerating, but he was not entirely wrong. Tax is one of the key pillars of government, and, indeed, of society itself.
No sane person enjoys paying it. But without our taxes, the British state, from the nurses in your local hospital to the guards at Buckingham Palace, would not exist.
Since 2010, when the income tax threshold was just £6,450, the Tory-led governments have steadily increased the allowance, on the grounds that this takes the pressure off low-earners. But this has come at a social and political cost
No taxes would mean no borders, no roads, no police, no NHS, no state pensions . . . and the list goes on.
A country without taxes is, almost by definition, a failed state.
In this respect, then, we are bound together as citizens by something none of us likes. We are, as they say, all in it together.
Or rather, some of us are.
For as the Institute for Fiscal Studies (IFS) reported this week, the latest HM Revenue & Customs tax data shows that the percentage of British adults paying income tax has fallen to just 57 per cent, the lowest figure this century.
To put it another way, 43 per cent are paying no income tax at all. Walk down your local high street, and almost half the people you pass aren’t paying a penny.
Of those, a growing number are retired. Some are unemployed; some have given up work to concentrate on their families.
But an increasing proportion fall below the income tax threshold (the amount you can earn in a year without having to pay tax) which has been raised from £6,450 to £12,500 since the Conservatives came into office in 2010.
According to the IFS calculator, almost 12 million people earn less than £12,500 a year, which means they don’t pay any income tax. That’s good news for them, at least in the short term. But it has consequences.