Tax and Smith & Williamson
"Familes pay 50% more tax under Labour", screams the Daily Telegraph, repeating (I assume, as the conclusions seem as absurd) an updated version of the completely flawed analysis undertaken by Smith & Williamson three (can it really be? - must be because of the prospect of an election). As I noted last year, here and here, the implications of this analysis are either that the average family buys a £1m plus house, or they move house every year.
More based in reality is the Sunday Telegraph's rather similar story, which is that "income tax had doubled under Labour". By this the mean twice as money is now collected by income tax than it was in 1997. This seems plausible. However they then say:
Official figures show a 100 per cent increase in the tax burden faced by wage earners – whose income has only risen 40 per cent since 1997.
This is less defensible. The wording 'burden' implies usually the % paid in tax, rather than an absolute figure. In any case it is only correct if 'wage earners' means ALL 'wage earners' as collective group, not an average individual. As the article notes later there are more 'wage earners' than there was in 1997. Finally, that 40% figure looks very suspect. It would mean that average earnings have risen by 3.4% a year since 1997 - in NOMINAL terms. So less 2.5% inflation, that would be real wage growth of just 0.9%, which I think is too low. The National Statistics data suggests more like 50%.
posted by Matthew @ 9/30/2007 05:05:00 PM
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