Households living off the lowest wage packets are taxed a higher percentage of their income than those in any other income group, highlighting the lopsided nature of Britainís tax system.
According to data gathered by the Taxpayerís Alliance, based on figures from the Office for National Statistics (ONS) the average British family part with £274 more than they receive in benefits, yet the top 10% highest earning families pay over £30,000 more in tax than they receive from the state, suggesting it is not the wealthy shirking from their fiscal duties which is responsible for the plight of the poorest familiesí tax woes.
Rather, council taxes on property and increased VAT combined with stealth taxes on cigarettes and alcohol are the key propellants of the greater tax burden on the shoulders of the countryís poorest households.
Together these levies contribute to the staggering 47% of their gross income, estimated at an average of £9743, with 13.9% going towards VAT.
As such, reductions in VAT and taxes on cigarettes and alcohol seem to be the non-discriminatory route to take, as further increasing taxes for the wealthy would be unfair given how little they require from the state in comparison to what they currently pay, and would essentially serve to further unbalance an already muddled system.
Before taxes are applied, the highest earning income group earn 27 times more than low income households, but this figure falls significantly to 5.8 times as much after taxes are accounted for, according to the Taxpayer Alliance.
After tax, the lowest earning households take home a shade over £5000, and receive an average of just under £8000 in health and educational benefits, indicating they are being provided with a decent amount of aid.
But this much needed assistance accounts for little if taxes continue to get hiked up, as they are simply not equipped to combat with further rises to taxes.
Moreover, despite the average poorest household receiving more in benefits than it pays in taxes, this occurrence varies from region to region with houses across the South of England and London lining the pockets of the taxman with more than they receive in welfare.
However, in all other regions the trend is reversed, with the North East of England a particularly purple patch for benefit seekers exhibiting households taking in an average of £3175 more in benefits than they pay in taxes, compared with London where struggling workers are paying over £4,000 more to the state than they receive in benefits.
Jonathan Isaby, Chief Executive of the TaxPayers’ Alliance, said: “This analysis shows how pernicious our tax burden has become. Not only does the tax system hit the poorest hardest, but those at the top are already contributing far more than anybody could reasonably describe as their “fair share.” Our tax system is neither progressive nor fair, and we need radical reform as well as necessary savings if the way we tax and spend is to become fit for purpose.”
Despite the Coalitionís decision to lift the lowest income tax bracket to £10,000 this year, effectively relieving 3 million people of their struggle to meet income tax requirements, households are still struggling to make ends meet.
As well as reducing consumption taxes, namely VAT, & taxes on cigarettes and alcohol, the Taxpayerís Alliance called for government to align National Insurance thresholds with Income Tax, with a view to getting rid of it completely in order to release the shackles financially constricting the poorest British Workers.
In addition, the consumer group said that raising taxes for the rich is a crude move, fuelled by political desire rather than meaningful reform, and that public spending cuts are the way forward as opposed to increasing the tax burden.