Embargoed: 00:01, Monday 6th May 2024
Analysis by the TaxPayers’ Alliance of new Office of Budget Responsibility (OBR) figures has found that the tax burden has fallen for the first time in this parliament, but is forecast to rise to an 80-year high by 2028-29. As a percentage of GDP, the tax burden fell from 36.3 per cent in 2022-23 to 36 per cent in 2023-24, having increased from 33.1 per cent in 2019-20. But with the tax burden expected to increase again to 36.5 per cent in 2024-25, a total increase of 3.3 percentage points (due to rounding) since 2019-20, this will be the biggest tax-raising parliament since 1950. Research by the TPA has previously found that governments which raise the tax burden typically lose elections, while those which lower the tax burden typically win elections. Government spending is set to fall to 42.5 per cent at the end of the decade, the lowest level since 2019-20, but still higher than any pre-pandemic year between 2013-14 and 2019-20. The TPA is calling on the government to ensure that the fall in the tax burden over the latest financial year isn’t an anomaly and that the current trajectory towards an 80-year high burden is changed.
READ THE BRIEFING NOTE HERE
Key findings:
READ THE BRIEFING NOTE HERE
John O’Connell, chief executive of the TaxPayers' Alliance, said: "The economy is set to hit yet another grim record by the end of the decade, even if the projected fall in spending represents a glimmer of hope. “An 80-year high tax burden will mean more misery for hard-pressed taxpayers and businesses, suffocating the economy for many years to come if action is not taken. “Ministers need to ensure the recent fall isn’t simply a one-off by bringing in a serious package of tax cuts and simplification”
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Elliot Keck
Notes to editors:
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