Top earners pay 57% in taxes

Top earners pay 57% in taxes

New research calculates overall marginal tax rate

Britain’s top earners are paying substantially more than half their earnings
back to the government in taxes, when all factors are taken into account, a new
study has found.

Patrick Minford, professor of economics at Cardiff University, said the
chancellor’s ‘tax-and-spend policies’ had pushed the overall marginal tax rate
on Britain’s highest earners to 57.1%.

Average taxpayers are not much better off, paying around 48.5% once national
insurance contributions, value added tax, excise duties are added to income tax,
The Business reported.

Minford said: ‘My figures represent the percentage of the wage paid by an
employer that is taken by the state – in national insurance, indirect tax and
income tax.

‘It turns out that higher-paid employees get approximately £43 worth of goods
and services valued at their true cost for an extra £100 paid for their labour
by their employer. For the employee on average earnings, the equivalent marginal
tax rate is about 48%.’

Gordon Brown will reveal his Budget on 22 March.

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