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| What do the rich give back to society? | |
| (31 minutes later) | |
| As the rich are told they will pay most to repair the public finances after the recession, Michael Blastland, in his regular column, digs out a provocative fact about where the tax burden falls. But don't jump to any conclusions. | As the rich are told they will pay most to repair the public finances after the recession, Michael Blastland, in his regular column, digs out a provocative fact about where the tax burden falls. But don't jump to any conclusions. |
| Imagine all the nation's income tax sitting in a pile in the Treasury, a great mountain of ready cash (£147,856,000,000 in 2008-09, according to Revenue and Customs). | Imagine all the nation's income tax sitting in a pile in the Treasury, a great mountain of ready cash (£147,856,000,000 in 2008-09, according to Revenue and Customs). |
| What share of that pile was paid by those taxpayers with the highest one per cent of incomes? | What share of that pile was paid by those taxpayers with the highest one per cent of incomes? |
| a. 1% | a. 1% |
| b. 5% | b. 5% |
| c. 12% | c. 12% |
| d. 19% | d. 19% |
| Everyone has an opinion about the burden of taxation, but how many know where it falls? | Everyone has an opinion about the burden of taxation, but how many know where it falls? |
| The answer is | The answer is |
| We cheated. The answer is none of the options above. The people with the top 1 per cent of incomes pay very nearly a quarter of all the income tax, as the chart shows. So option d - the highest available - gets points. The other options are at best half the true amount. | We cheated. The answer is none of the options above. The people with the top 1 per cent of incomes pay very nearly a quarter of all the income tax, as the chart shows. So option d - the highest available - gets points. The other options are at best half the true amount. |
| We can also see from the chart that people with the top 10% of incomes pay more than half the income tax. ( See link here ) | We can also see from the chart that people with the top 10% of incomes pay more than half the income tax. ( See link here ) |
| What does it tell us? That's where facts become interesting. Because you might draw all sorts of conclusions from this number. You might say that the rich pay plenty already; or that it simply shows how rich the rich are. You might be shocked by how much the state depends on the rich, but that might just confirm your belief that what's unfair is not the tax people pay but the incomes they begin with. | What does it tell us? That's where facts become interesting. Because you might draw all sorts of conclusions from this number. You might say that the rich pay plenty already; or that it simply shows how rich the rich are. You might be shocked by how much the state depends on the rich, but that might just confirm your belief that what's unfair is not the tax people pay but the incomes they begin with. |
| Or will you switch focus and argue that it reveals how many of those in the middle do not pay the lion's share of the welfare state, contrary to what some believe, but are in fact heavily subsidised by those at the top? | Or will you switch focus and argue that it reveals how many of those in the middle do not pay the lion's share of the welfare state, contrary to what some believe, but are in fact heavily subsidised by those at the top? |
| Happy to pay his share? | Happy to pay his share? |
| So are the middle classes spongers? Other data suggest that people receive services from the state greater in value than the tax they pay up to about 70 per cent of the way up the income scale, though that calculation is difficult and depends as much on households' composition - whether they have children at state school, are retired etc, - and makes no allowance for how efficiently services are provided. | So are the middle classes spongers? Other data suggest that people receive services from the state greater in value than the tax they pay up to about 70 per cent of the way up the income scale, though that calculation is difficult and depends as much on households' composition - whether they have children at state school, are retired etc, - and makes no allowance for how efficiently services are provided. |
| How we react to provocative data also says something about us. So here's another multiple choice question, not about tax, but about you. When you saw the answer, did you | How we react to provocative data also says something about us. So here's another multiple choice question, not about tax, but about you. When you saw the answer, did you |
| a. Change your mind in any way about the tax burden? | a. Change your mind in any way about the tax burden? |
| b. Assimilate this fact into your existing political opinion as fast as possible? | b. Assimilate this fact into your existing political opinion as fast as possible? |
| c. Say that this number alone doesn't tell us nearly enough so how can I know what to think? | c. Say that this number alone doesn't tell us nearly enough so how can I know what to think? |
| It doesn't, for example, tell us who pays the Vat, excise duty, or other taxes, it is only about income tax, which is the most progressive of taxes. It doesn't tell us what share of their income each group pays in tax - which will be some people's measure of fairness. | It doesn't, for example, tell us who pays the Vat, excise duty, or other taxes, it is only about income tax, which is the most progressive of taxes. It doesn't tell us what share of their income each group pays in tax - which will be some people's measure of fairness. |
| The Office for National Statistics' annual publication about the effect of taxes and benefits (see internet links, above right) suggests that most people actually pay a similar share of their income in taxes when all taxes are taken into account, even up to the top 10 per cent as a whole. | The Office for National Statistics' annual publication about the effect of taxes and benefits (see internet links, above right) suggests that most people actually pay a similar share of their income in taxes when all taxes are taken into account, even up to the top 10 per cent as a whole. |
| But my guess is that a lot of us are tempted by b: to think less about the data than how it can be used for our side of the argument, rather than to set out by asking the open question implied by c: what data would I need to form a proper opinion? | But my guess is that a lot of us are tempted by b: to think less about the data than how it can be used for our side of the argument, rather than to set out by asking the open question implied by c: what data would I need to form a proper opinion? |
| For this reason, an economist acquaintance of mine says - provocatively - that the facts do not matter to political argument. If, like this column, you assume value in trying to know and understand the data, that's a hard conclusion to swallow. Is it true? | For this reason, an economist acquaintance of mine says - provocatively - that the facts do not matter to political argument. If, like this column, you assume value in trying to know and understand the data, that's a hard conclusion to swallow. Is it true? |
| Where does your money go? | Where does your money go? |
| A minor political scandal is how hard it is for people to see easily, in an accessible form, how tax is spent, compare previous years, break it down regionally, and so on. | A minor political scandal is how hard it is for people to see easily, in an accessible form, how tax is spent, compare previous years, break it down regionally, and so on. |
| Where Does My Money Go?Enlarge Image | Where Does My Money Go?Enlarge Image |
| The Government Spending (Website) Bill would have created a free, wide-ranging, searchable website of all spending by government and executive agencies. But not enough MPs turned up to vote, from any party, so the Bill failed. Never mind, it is only the sort of basic information that citizens might use to make sense of probably a good half of all political argument. | The Government Spending (Website) Bill would have created a free, wide-ranging, searchable website of all spending by government and executive agencies. But not enough MPs turned up to vote, from any party, so the Bill failed. Never mind, it is only the sort of basic information that citizens might use to make sense of probably a good half of all political argument. |
| In the US, A Federal Funding and Accountability Transparency Act requires official bodies to publish figures on spending in a single place. | In the US, A Federal Funding and Accountability Transparency Act requires official bodies to publish figures on spending in a single place. |
| Where Does My Money Go?Enlarge Image | Where Does My Money Go?Enlarge Image |
| In the UK, the only attempt to do this that I knew of was ukpublicpending.co.uk by Christopher Chantrill, a writer based in the US. (See link, above, right on this page.) | In the UK, the only attempt to do this that I knew of was ukpublicpending.co.uk by Christopher Chantrill, a writer based in the US. (See link, above, right on this page.) |
| Then last week, I was contacted by the Open Knowledge Foundation, a charity, to say they had trawled official data to identify where the money goes and turned this into various visualisations. Readers can see them at WhereDoesMyMoneyGo.org (Again, the link is above, right) | Then last week, I was contacted by the Open Knowledge Foundation, a charity, to say they had trawled official data to identify where the money goes and turned this into various visualisations. Readers can see them at WhereDoesMyMoneyGo.org (Again, the link is above, right) |
| Add your comments on this story, using the form below. | Add your comments on this story, using the form below. |
| The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions | The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions |