Today is 'Tax Freedom Day', the point calculated by the Adam Smith Institute as the day when the average taxpayer has earned enough to pay off all their taxes for the year.
As the Institute explains, 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 1 June – just to pay taxes! And the March 2007 Budget did nothing to change that so Tax Freedom Day 2007 once again falls on 1 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.
However, there are regional variations on when Tax Freedom Day falls so for those of us who live in the South East, we don't start earning for ourselves until 3rd June. Further details of regional variations can be found HERE.