The UK tax burden: can Labour be called the ‘party of fairness?’

Document type
David Byrne; Sally Ruane
Date of publication
1 November 2008
Thinkpiece; 40
Social Policy, Poverty Alleviation Welfare Benefits and Financial Inclusion
Social welfare
Material type

Download (1.7MB )

This paper describes and comments upon the distribution of the tax burden in the UK.  Its focus is on direct and indirect taxes levied on individuals and not on corporation taxes or capital taxes. The analysis draws upon data from the Office for National Statistics to examine average distribution of the tax burden across the first ten years of the Labour administration and how the current distribution of the tax burden affects different household types.  The analysis shows that:

  • The top 10% do not pay their fair share of tax.
  • The bottom 10% face a highly punitive tax burden.
  • ‘Middle England’ bear the brunt of the tax burden.

The reasons for this are examined in more detail, with the paper concluding that indirect taxes are regressive and this regressive character is not outweighed by direct taxes. The only consistently progressive tax is income tax and this fails to keep pace with the rising incomes of the top 10%. This is partly a result of tax avoidance by the better off and particularly the ability by some to define income gains as ‘capital gains’ and to pay capital gains tax instead of income tax. There is an overwhelming case for the extension of the full rate of National Insurance across all earnings so that it redistributes among all workers. This raises the question of whether income tax and National Insurance should now be unified.

Related to Social Policy

Twenty twenty: the year Black Britons fought Covid-19 and health inequalities

Latest bulletin from Thomas L Blair focusing on some of the key issues effecting Black communities in Britain

The winter (economy plan) is coming

Briefing on the Job Support Scheme

Low Pay Britain 2020

Report on the impact of the coronavirus on minimum wage policy

Macroeconomic Policy Outlook Q3 2020

Briefing on the outlook for the labour market during the coronavirus

More items related to this subject

Related to Compass

The very modern prince: the 21st century political party and the political formation

This article examines the process of transition away from the traditional progressive political party. The author argues that the left parties – both social democratic and

The context for a world without poverty.

This paper aims to look at how poverty can be ended as well as getting the support and backing for policies and strategies that could make a world without poverty possible. With this project, the Webb

Universal Basic Income: an idea whose time has come?

This paper examines the desirability and feasibility of introducing a universal basic income (UBI) scheme in the UK. It analyses the merits of such a scheme, how it might be implemented and what role

Social democracy withouit social democrats?

This report seeks to understand the rise and fall of social democracy as a temporary blip made possible by a particular alignment of forces after the Second World War. It then briefly describes the

More items related to this publisher