Tuesday, 30 June 2015

ONS reveals the share of tax and benefits for rich and poor

Over half (51.5%) of British households received more in benefit from the State than they pay in taxes, according to the ONS, while the richest fifth of Britons pay 43.7% of the nation's tax. The richest fifth of households had an average income of £80,800 in 2013/14 before taxes or benefit from welfare and public services while the poorest fifth had £5,500. But after tax and benefit is taken into account, the figures change to £60,000 and £15,500 respectively. The poorest fifth of households paid 37.8% of their income in taxes last year, while the richest fifth paid 34.8%. In the first year of the coalition the figures were 38.2% and 33.6% respectively. Chris Leslie, Labour’s shadow Chancellor, said the figures show the Chancellor should not reduce the top rate of tax or reduce tax credits for working people. Frances O’Grady, general secretary of the TUC, added: “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 median disposable income of retired households was 7.3%, or £1,400, higher in real terms in 2013-14 than before the start of the economic downturn, while the disposable income of non-retired households was 5.5%, or £1,600, lower.

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