Ritchie discovers the British tax system

And he\’s shocked I tell, shocked.

He finds that the direct tax system is progressive, the indirect system highly regressive and the allocation of benefits is progressive. Gini on market incomes is somewhere over 0.5 and at the end of the money shuffling is 0.34 or so (don\’t take those as being too accurate, I\’m just eyeballing).

The system as a whole is progressive: as anyone who bothered to read Chris Dillow could tell him.

And what should we do about it?

The reality is that now is the time for progressive taxation reform – to make sure that the richest in the UK pay a fair share for the society we live in, because they do not right now. And that has to change.

OK, let\’s take that and see where we can go with it. This is the original report that everything comes from.

Hmm, average income in the top decile is around £90,000 (no point in being more accurate than that throughout). Cut out everything they get from the State and everything they pay to the State and you get £65,000 a year. There are some 2.5 million households in that top decile.

So, total income of \”the rich\” is £225 billion a year, of which they pay £63 billion or so a year to the State (nett of course, taxes out and benefits in) leaving them with about £163 billion a year to wave in the faces of the downtrodden poor.

How much does the whole system cost a year? Around £660 billion isn\’t it?

So, we could take all the money off the rich, every penny (and of course we could only do this once as the next year they\’d all bugger off) and we\’d be, umm, lessee….£660 minus about 60 they already pay minus another 160 ish that we let them keep so far….what, £440 billion short of what government costs us?

And that\’s why we tax the poor, because the rich simply don\’t have enough money to pay for the State we already have.

If you want to have a State that the poor don\’t have to pay for, but the rich carry all the burden, then you need a smaller State than the one we have.

8 comments on “Ritchie discovers the British tax system

  1. Excellent.

    The comments on Murphy’s piece contain this belter, from the man himself

    “So very politely, stop talking complete nonsense and stop telling me I’m confused: I think it is you who needs serious help with your delusions – because that is what they are”

    If he didn’t exist (and he does, I met him in the days when he was more than happy to advise those despicable rich foreigner non-doms, albeit badly, on how to avoid paying tax) someone with too much time on their hands would have to invent him.

  2. It all boils down to this: “to make sure that the richest in the UK pay a fair share.”

    It all depends on what you mean by “fair”. For the Richards of this world, what the “rich” pay is never “fair” enough for them.

    For me, and I’m not one of the richest but still a higher rate tax-payer, I already pay more than my “fair” share.

    When the top 10 per cent (approx) pay 90 per cent of all income tax receipts then we’ve gone way beyond “fair” and into “theft” territory.

  3. Why stop at the rich? Let’s have everyone paying a fair share. I pay for what I use, you pay for what you use and all the welfare and state sector parasites pay for what they use.

    That’s fair.

  4. Why are the rich paying more? They do more for the country by being productive and that’s why they’re wealthy!

    The only fair share is an equal share. i.e. everyone must be charged the same.

    Discrimination against the productive is the worst possible thing to do.

  5. You do a fine job of demolishing the feeble-minded Ritchie. I guess there must be a question as to whether he is influential enough to be worth demolishing, or whether he is widely recognised as a pitiful idiot and you unfortunately add to his limited credibility by responding to him.

  6. Pingback: Now my advice for those who die – Declare the pennies on your eyes « Cambridge University Conservative Association

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