(Acclaimed News) A newly released report has revealed, as many have suspected, that British taxes are currently weighted in such a way that hits the poorest families harder than the richest ones. With the Tories considering tax cuts for the rich, and reducing benefits plus tax credits for the poor that situation could get worse instead of better.
The 2014 figures from the Office of National Statistics (ONS) clearly showed the disparity between the richest and the poorest. The richest fifth of the population had an average yearly income of £80, 800 before taxes or benefits were taken into account.
In contrast the poorest fifth have to survive on 1/15th of that, a mere £5,500 (and that is if they avoid DWP sanctions).
However those poorest families see 37.8 per cent of their income go back to the government in taxes, whilst the richest have 3 per cent less of their income go in taxes.
If 160 Tory MPs have their way the balance will tilt towards the rich even further. They are urging Chancellor George Osborne to lower the top rate of tax to 40p.
Their argument is that lower taxes for the rich eventually makes everybody richer, assuming of course they use the money they save to create extra jobs instead of spending it on luxury items, or on foreign holidays.
The TUC General Secretary, Frances O’Grady argues that the rich should be paying more taxes not less:
“There can be no argument for reducing taxes for the richest when they are already contributing a smaller share of their income than the poorest.
“The government should instead be looking at how the wealthiest can make a fairer contribution to improving the public finances.”
This is especially the case as Iain Duncan Smith has declared that there will £12 billion in welfare cuts.
Ms O’Grady continued:
“Without tax credits, the low-paid would be much worse off. It will be a disaster for millions of families if the government rushes ahead with plans for extreme cuts to support for people in work.”
These cuts have already begun with the closing of the Independent Living Fund for disabled people, and cuts to working tax credits, and the freezing of child tax credits. Universal Credit is supposed to make people better off if they are working, but it is already three years late, and assuming it ever woks that is.