Why the richest are paying their biggest share of income tax
George Osborne made much of the fact the the richest are paying a high share of income tax.
But that’s because the richest have got richer.
Here’s a great chart from Declan Gaffney showing (after housing cost) income over the last five decades using data from the IFS. (See Declan’s post for a bigger version). It’s easy to see how the the richest 5% have been climbing away from the rest since the mid to late 70s.
If the rich are getting richer at a faster rate than everyone else – even if you change no tax rates or allowances – they will pay more tax. That’s arithmetic, not economics.