Portillo is a Dimwit

Michael Portillo, the former Conservative defence secretary, also said the statistics had taken him by surprise.

“The tax system is more progressive than I had imagined,” he said.

How long have you been in friggin\’ politics?

Shouldn\’t you actually know by now that the UK tax system is markedly more progressive than those of most other OECD countries?

14 comments on “Portillo is a Dimwit

  1. One can only assume that Portillo spends too much time with Guardian types who believe that no taxation system can be progressive unless it has an 80% top rate.

  2. What proportion of the national income do they earn (I’m not sure of correct term)? If they earn 30% of the national income, then it’s not surprising they pay 30% of the tax.

  3. @Luke. Here are some OECD numbers from 2005.

    Richest decile earn 32% of income and pay 39% of taxes.

    I suspect earned income has risen marginally since then (2005 was during boom) and percentage of taxes paid risen considerably more.

  4. HMRC 2011-12 figures – there are about 30 million tax payers. Incomes above £500k there are about 43,000. So, very roughly, that’s your 1% top income earners.

    They earn about £51b and pay just under £23b of that in tax.

    Total taxable income is £906b – so they earn about 6%. Total income tax is £167b – so they pay about 14% of all tax.

  5. Thanks for your answers. @The Thought Gang, I did not include wealth on the (admittedly crude) basis that wealth tends to produce income through dividends/interest/rent. @Surreptitious evil, I am not sure that taxable income is a good basis – plenty of the 1% will shelter some their investment income (perfectly legitimately, within spirit and letter of law). VAT, NI are not included (nor is any account taken of transfers from which many of the 99% benefit). As Luis Enrique says (helpful link) , it is not clear cut.

    My point (badly put) was that it is not clear whether the fact that 1% pays 30% of income tax shows
    a) that we have a progressive tax system (which I take to mean that higher earners pay a greater proportion of their income in tax) or
    b) that the top 1% earn a great deal relative to the rest or
    c) not very much on its own (my hunch).

    As a basis for action, it could (on its own) indicate that
    a) raising tax on the top 1% is a good idea as it would raise a significant amount or
    b) as the top 1% pay so much, we should be cautious about raising taxes on them , and maybe should reduce their taxes in case they scarper
    c) not very much.

  6. I suspect the 1% pay an even higher proportion of the total CGT take than they do in income tax. Especially given the increasing harmonisation of the rates (monies invested in your own business excepted.)

    You can add inheritance tax to that, as well.

  7. Oh, dear. Mea culpa. I was trying to do 2 other things at the time – one of which was leave the office to go to a meeting!

    Okay, lets take “all additional rate payers” from the same source. 308,000 of them. Kicks in, obviously, at £150,000. Although, even at the £200,000 income point, some people are still in just the higher rate (I assume this is large pension contributions …)

    They pay £47bn in tax on income of £115 or so, 12.5% of the income; 28.1% of the income tax.

    But that doesn’t affect the the “it’s not just income tax” arguments.

    They earn a total of

  8. I heard Portillo make that comment on a Radio 4 discussion programme (The Telegraph really works for its quotes) and in context I think he was feigning surprise, so that the BBC lefties around him might actually think for a moment ratehr than dismiss it as normal Tory blather.

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