One in eight rich people pay over 40% of all their income in income tax

HM Treasury released some figures today in support of George Osborne. If you read them below you can see that a few very rich people did have low tax bills in 2010/11. But we don’t know if that was a one-off year or the same people always pay less tax. I’m all for stamping down on tax evasion and, if necessary, making the tax simpler and fairer but actually most rich people are not getting away with very small tax bills.

What it does also show is that 80% of rich people have an average tax rate of over 40%.

And nearly 90% of those with incomes in the £5m – £10m range are coughing up £2m – £4m each. (Thanks very much guys – our economy needs you!)

So a lot of rich people are paying their way but are being treated like pariahs.

Of course statistics can be used to prove anything. But the Government don’t seem to be using them fairly.

Margaret

Proportion of individuals reporting various average tax rates by total income category (2010-11)
Income
£100k to £150k £150k to £250k £250k to £500k £500k to £1m £1m to £5m £5m to £10m Over £10m
Average tax rates
Above 40% 0% 6% 73% 81% 80% 81% 72%
30% to 40% 67% 77% 18% 11% 10% 8% 12%
20% to 30% 24% 13% 5% 4% 5% 4% 8%
10% to 20% 8% 3% 2% 2% 2% 3% 3%
Under 10% 1% 2% 2% 2% 3% 4% 6%
Source: HMRC
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