ASI: Tax Freedom Day 2008 will be June 2

Tax Freedom Day – the day in the year when we stop working for the government and start working for ourselves – is June 2 this year.

That means that for 155 days of the year, every penny earned by the average UK resident was taken to support government expenditures.

When Gordon Brown became chancellor in 1997, Tax Freedom Day was May 26 – a whole week earlier.

Unfortunately, the true picture could be even worse than these figures suggest. Last year Tax Freedom Day actually came three days later than forecast, because the economy grew more slowly than the government expected. The signs are that 2008 could be no different.

And if government borrowing is included, Tax Freedom Day does not come until June 14.

Government spending will reach £600bn in 2008. That's £10,000 for every man, woman and child in the UK – and twice as much as when Gordon Brown became Chancellor.

If Gordon Brown had only raised public spending in line with inflation, he could have abolished income tax, corporation tax, capital gains tax and inheritance tax by now – leaving the taxpayer some £200bn better off.

Dr Eamonn Butler, the director of the Adam Smith Institute, said:


"The Treasury loathes Tax Freedom Day because they don't want people to be able to picture just how much tax they pay. They prefer to use stealth taxes and an ever more complicated tax code to hide the reality from taxpayers. The value of Tax Freedom Day is that it pulls the wool from people's eyes."

Contact:

Dr Eamonn Butler – 020 7222 4995
Gabriel Stein – 020 7382 5922
Tom Clougherty – 07793 748 721

Note to editors:

Tax Freedom Day is calculated for the Adam Smith Institute by Gabriel Stein, a Swedish economist who has lived in the UK since 1990. In 1981 he worked in the Israeli Ministry of Finance. From 1982 to 1991 he ran his own economics and public affairs consultancy, Stein Brothers. He is currently a director of Lombard Street Research Ltd.

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.

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 more information, please visit www.adamsmith.org/tax-freedom-day/