Government rely on rich for cash
The Government is becoming increasingly reliant on the rich for tax revenues, the Telegraph reports.
This year the rich are expected to pay around £158 billion to the taxman this year, 27 percent of all payments. However, the disparity in tax revenues between high and low earners is believes to be further perpetuating income inequality.
The government cannot let the amount paid by the wealthy fall because it is already facing a loss of £29 billion in revenue over the next two decades, as oil and gas reserves are depleted, people smoke less and cars become more efficient.
It has also been indicated that the UK needs an extra £22billion - £58.5 billion of tax rises and spending cuts to support the aging population..
However, the government’s dependence on these funds is a worry for some, and if income distribution were to change, the government would be forced to raise rates for those on lower pay. Paul Johnson director of the Institute for Fiscal studies said: “It is a little risky for the public finances to be so dependent on such a small chunk of the population”.
This was posted in Bdaily's Members' News section by Ruth Mitchell.