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AIA

Think tank hails 'tax freedom day'

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31st May 2005
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'Tax Freedom Day' has fallen three days later this year than in 2004, according to the Adam Smith Institute.

The think tank's president Dr Madsen Pirie declared: "Until today (31 May) every penny earned by the average Brit has gone to the Chancellor."

Tax Freedom Day is calculated for the ASI by Lombard Street Research, by "comparing general government tax revenue with the net national income (NNI)".

The ASI says: "The total of all government tax revenue - direct and indirect taxes, local taxes and national insurance contributions - is calculated as a percentage of NNI at market prices. The result is then converted to days of the year, starting from 1 January."

Pirie commented: "The later it gets, the higher our taxes, and the lower our competitiveness and our ability to create new wealth and jobs."

Andrew Goodall
Editor, TaxZone

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Richard Murphy
By Richard Murphy
01st Jun 2005 08:36

There is, of course, ample evidence to show this is wrong

The logic behind tax freedom day is that if you pay high taxes your are worse off.

The logic is, of course, unproven. The countries with the highest taxes and therefore the latest "tax freedom days" are in Scandinavia. They also have the best education systems, lowest rates of infant mortality, low crime rates, sound economies and so on. In fact, on most measures of what matters most to most people they score very well.

The US on the other hand has 20% of children with no access to healthcare, massive income disparities which create perceived lack of wellbeing (which is much more important in terms of human happiness than actual differences in wellbeing) and so on.

I'm not actually arguing either system is right or wrong. But to suggest that tax is simply a burden and that no benefit is derived from it is an obvious, and utter nonsense.

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