Taxes in Britain are too high and have become increasingly complicated

Spending has risen dramatically as a share of national income across the developed world in the 21st century, but this rise has been particularly sharp in Britain. As a result, government expenditure accounts for a rising share of the economy relative to private expenditure.

Ratios of UK government and private spending to UK GDP

Ratios of UK general government expenditure and private expenditure to UK GDP at factor cost with implied March 2012 Budget forecasts for 2012 to 2016

 

Public opinion is against current high levels of tax

The public support a spending ratio of around a third. In a 2011 poll carried out by ComRes, respondents were asked: 'what proportion of the UK’s national income should government spending account for?'. The average response was 33 per cent. Broken down for voters of all three main political parties, the results were as follows:

What proportion of the UK's national income should government spending account for?

 

Britain's taxes are highly and increasingly complicated

The burden imposed by the tax system cannot simply be measured by rates of tax or the amount of revenue taken in. There are additional hidden costs arising from the legal obligation to comply with often (and increasingly) complex tax codes. This places a huge burden on families and businesses across the UK, and means that costly adminstration errors are made.

Tolley's Tax Guides - the handbooks of tax legislation, a good measure of tax complexity - have more than doubled in length since 1997. The guide to Corporation Tax alone is 185 per cent longer than it was 10 years ago.

The guides are now so long that it would take the world’s fastest speaker, Steve Woodmore, more than 5 days to read them aloud.

The tax system has also becomes less stable. The Institute for Fiscal Studies calculated that there have been 309 major tax changes since 1979, almost ten a year. The uncertainty that large numbers of changes brings make it far harder for businesses and individuals to plan for the long term.

 

Antonin Scalia

Antonin Scalia

"It is said one of Emperor Nero’s nasty practices was to post his edicts high on the columns so that they would be harder to read and easier to transgress"