Taxes have become a postcode lottery!

Recent figures on the current burden of taxes issued by the Adam Smith Institute and Lombard Street Research show just how the government have even turned taxation into a postcode lottery!

The think-tank's economic boffins looked at the tax bill paid by residents of different regions, and translated them into a 'Tax Freedom Day' for each area. The results revealed a postcode lottery of tax burdens, dependent upon where you live.

Offa's Dyke offers tax breaks!

Locally it would seem that the ancient boundary of Offa's Dyke running between the West Midlands and Wales now represents a line of taxation, with taxpayers in Wales working for Gordon Brown from January 1st until May 24th this year, while those living in the West Midlands have the dubious privilege of working for the Chancellor an extra eight days until June 1st.

Increasing tax burden

Stephen Pratt, Director of Midlands based independent financial advisers Exclusive Asset Management who are national sponsors of Tax Freedom Day, noted that the tax burden for the West Midlands is just one day short of the national average for England of June 2nd. "What is clear from these figures is that the tax burden is still rising," he added. "Since 1997 the number of higher rate tax payers has risen from 2 million to 3.5 million, whilst the number of estates hit by Inheritance Tax has doubled over the same period, with this deeply unpopular tax raising £3.56 billion for Mr Brown this year, 128 per cent more than in 1997."

Waiting longer and longer for freedom from tax

"Nationally, the government takes about two-fifths of GDP in taxes," explained Gabriel Stein of Lombard Street Research, who compiled the Adam Smith Institute figures. "That includes not just income tax, but things like VAT, excise duty on wine and beer, taxes on air travellers and on inheritance."

Adam Smith Institute Director Dr Eamonn Butler observes, "Unfortunately, the day when we have paid off our taxes and can start working for ourselves is getting later for all of us. This year, Tax Freedom Day falls a week later than it did just four years ago. That is an extra week that the Chancellor has forced taxpayers to work for him. At that rate, the average UK citizen will soon end up spending half the year working just to pay tax!"

"Tax Freedom Day is a good indicator of just how large the tax burden is," continued Dr Butler. "We have been calculating it since 1992. We will watch the Budget closely and then calculate where Tax Freedom Day will fall in the coming year. I do not expect it to be good news. Gordon Brown is not in the habit of making the tax burden any lighter."

The regional Tax Freedom Day dates have been calculated on the basis of 2004 population statistics and tax revenues, uprated to reflect the national increase in the tax burden since that time.

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