We all pay Income Tax on our earnings and investment income. If you read the press you would think that the top earners get away with not paying their share.
According to the statistics, this is not true.
The top 1% of earners pay 27.5% of all Income Tax.
And this is due to increase over the current parliament. By 2020, the top 1% will contribute a massive 30% of all Income Tax receipts.
Who are the top 1%?
The top 1% consist of 350,000 earners and each one pays tax of £140,000 per annum or £49 billion in total.
What are the historic trends?
In 1978-79 the top earners contributed 11% of total Income Tax. This increased to 24.4% by 2007 and reached 27.5% last year.
Part of this pressure has been driven by the Governments policy of taking low earners out of the tax net completely and the shortfall in tax revenues has been recovered from high earners through changes in the top rate of tax and the restriction of pension contributions. Further tax will be raised from the new Dividend Tax.
The information for this piece was provided by the Institute of Fiscal Studies (IFS) as reported in The Times newspaper.