| Tax Freedom Day |
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Tax Freedom Day 2008 falls on 2 June.
This means that for 155 days of the year, every penny earned by the average UK resident was taken to support government expenditures.
Tax Freedom Day shows just how long we spend working for the Treasury, rather than ourselves. Overall, the government takes more than 40% of national income. This means that the average UK resident has to work a full five months of the year solely to pay that tax bill. Last year, that meant working from 1 January to 4 June – just to pay taxes! The 2008 Budget did little to change that. Assuming the Chancellor got his growth forecasts right, Tax Freedom Day 2008 will fall on June 2 (just one day earlier, since this is a leap year). And if you take government borrowing into account, Tax Freedom Day does not come until 14 June.
For much of the last few years, however, Tax Freedom Day has been coming later and later. In fact, it falls a full week later now than it did back in 2002. That is an extra week of working for the Chancellor. At this rate, it will not be long until we spend longer working for the government than we do working for ourselves.
Tax Freedom Day is calculated by taking the UK's net national income and calculating how much of that is taken away in taxes. These taxes include not just income tax, but VAT, inheritance tax, stamp duty, car and fuel taxes, excise taxes on alcohol and cigarettes, taxes on companies and employment, and many more. For technical stuff about how Tax Freedom Day is calculated, click here. The Adam Smith Institute has been calculating Tax Freedom Day since 1991 and has figures for it going back to 1963 – when Tax Freedom Day was more than a whole month earlier, falling on 24 April. Please use the menu on the left to find out more. |
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At a glance
- Tax Freedom Day is the day on which we stop working for the Chancellor and start working for ourselves.
- If the average person works from 1 Jan each year, it will be June before they have earned enough to pay their taxes.
- The tax burden isn’t just income tax and national insurance, it includes VAT, fuel taxed, alcohol and cigarette duties, airline tax, fuel duties, car tax and many, many more.
- The preferences for stealth taxes in the past few years has meant that it’s becoming harder for people to understand how much they are paying. The importance of Tax Freedom Day is that it detects stealth taxes.
- Government spending will reach £600 billion in 2008 – that's £10,000 for every man, woman and child in the UK, and twice as much as in 1997.
- If public spending had only grown in line with inflation since 1997, we could have abolished income tax, corporation tax, capital gains tax and inheritance tax, leaving the taxpayer £200 billion better off.
Tax Freedom Day
| Introduction |
| About Tax Freedom Day |
| History of TFD |
| Across the UK |
| Technical info |
| Dreary dates |
| Tax links |
| Around the world |
About the ASI
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