A lifetime of tax

chrismac1

Someone on median income earns 26,000 (if in work) give or take a few bob. Let's say he or she works for 40 years. Although UK Government spending as a % of GDP in 2010 was 45%, let's hope this was something of a blip due to Labour sanctioning all sorts of silly public sector jobs and the recession biting. The long run average - other than during Wars - is more like 40%.

So 40% of 26,000 times 40 years = £416k handed over by someone on median pay in 2012 money values.

Of which around £200k is value for money and the rest is just wasted.

Pennywise

OK, very rough calculations in today's money for the average wage of £26k over 40 working years.

Gross wage £26k
PAYE and NIC £5.5k
Take home pay £20.5k

Assume 1/4 spent on VATable payments, so VAT paid is £1k p.a.
Then fuel duty, airport taxes, insurance premium tax etc say £1k p.a. Council tax say £1k p.a.

Then stamp duty on, say, 3 home moves during the lifetime £12k

So far, tax paid over 40 years may be around £350k

Then off comes the benefits:

State pension £140 per week, £7,280 for say 30 years retirement £218k

Leaving say £132k "in the pot" towards policing, education, infrastructure, health services, etc., or over say 90 years of life, is just £1.5k per year which to me looks about right.

So, I'd say the "average" earner, just about breaks even over their life.

John_Pierpoint

Council tax.
Taxation by inflation.
Import duties
Smoking charges
Drinking charges
Local Authority charges (for something that gives you no take away added value the list is endless).
capital gains tax
Inheritance tax
Stamp Duty Land Tax
Stamp duty on share purchases
Gaming duty
Lottery tax
tax treatment of life insurance companies
insurance premium tax
tax on employee benefit trusts and pension schemes

Compulsory unmitigated payment on utility bills (for "green" measures)

Someone, presumably a Tory supporter, had a go at listing everything, but appears to have given up, now that the Condems have continued the tax increases.

http://myweb.tiscali.co.uk/garbagegate/item2/stealth.htm

John_Pierpoint

WaxiesDargle wrote: »

instead of interesting comparisons and clapton saying it's easy to work out...can anyone give an answer?

cheers

There can be no answer because the unit of measurement, the Pound Sterling, is a totally artificial concept, created at will by the Government. At the moment you are lucky because it appears to be highly valued as one of the least worse of such examples. Foreigners are "happy" to subsidise you year after year [touch wood].

The system of taxation is then designed so that you cannot understand it, it is based on this guide line:

[SIZE=-1]The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of squawking.


[/SIZE]

keithnic_2

I think you'll be surprised to see that the average earner in the UK receives far more from the State than they pay in. Go to entitledto.co.uk and enter married couple with two children on the average wage of £25k. I can't remember what salary (if any) I put down for the spouse.
I was shocked to see that child benefit and tax credits cancelled out any income tax and national insurance paid. Therefore, education, NHS, defence everything was received for free.

Arg

The NHS and education aren't that great and they're imposed on you so if we're looking at what the public gets we should also be looking at what it's denied or forced to take.

somethingcorporate

Pennywise wrote: »

OK, very rough calculations in today's money for the average wage of £26k over 40 working years.

Gross wage £26k
PAYE and NIC £5.5k
Take home pay £20.5k

Assume 1/4 spent on VATable payments, so VAT paid is £1k p.a.
Then fuel duty, airport taxes, insurance premium tax etc say £1k p.a. Council tax say £1k p.a.

Then stamp duty on, say, 3 home moves during the lifetime £12k

So far, tax paid over 40 years may be around £350k

Then off comes the benefits:

State pension £140 per week, £7,280 for say 30 years retirement £218k

Leaving say £132k "in the pot" towards policing, education, infrastructure, health services, etc., or over say 90 years of life, is just £1.5k per year which to me looks about right.

So, I'd say the "average" earner, just about breaks even over their life.

Thanks for having a stab, it looks fair.

I'd suggest there would need to be some provision in the £132k for child benefit and JSA etc as would the average person expect to be employed their whole life. I would guess not. Every time you go to A&E it costs something like £1k so how many times would the average person go to A&E?

I still think that the average person would take more than they put in to the system, by quite a considerable margin.

John_Pierpoint

somethingcorporate wrote: »

Thanks for having a stab, it looks fair.

Every time you go to A&E it costs something like £1k so how many times would the average person go to A&E?

I still think that the average person would take more than they put in to the system, by quite a considerable margin.

I've been to A&E once:

I fainted.
Wife panicked.
2 paramedics insisted to carting me off in their ambulance.
I got a nice cup of hot milky tea.
Wife collected me.

I am glad I did not have to pay the bill myself.

John_Pierpoint

keithnic wrote: »

I think you'll be surprised to see that the average earner in the UK receives far more from the State than they pay in. Go to entitledto.co.uk and enter married couple with two children on the average wage of £25k. I can't remember what salary (if any) I put down for the spouse.
I was shocked to see that child benefit and tax credits cancelled out any income tax and national insurance paid. Therefore, education, NHS, defence everything was received for free.

You have left out all the indirect and stealth taxes on the individual and all the taxes on business, that get passed on.

A land tax is one of the few that cannot be passed on and that is one of the few taxes we don't have in this country.

WaxiesDargle

Pennywise wrote: »

OK, very rough calculations in today's money for the average wage of £26k over 40 working years.

Gross wage £26k
PAYE and NIC £5.5k
Take home pay £20.5k

Assume 1/4 spent on VATable payments, so VAT paid is £1k p.a.
Then fuel duty, airport taxes, insurance premium tax etc say £1k p.a. Council tax say £1k p.a.

Then stamp duty on, say, 3 home moves during the lifetime £12k

So far, tax paid over 40 years may be around £350k

Then off comes the benefits:

State pension £140 per week, £7,280 for say 30 years retirement £218k

Leaving say £132k "in the pot" towards policing, education, infrastructure, health services, etc., or over say 90 years of life, is just £1.5k per year which to me looks about right.

So, I'd say the "average" earner, just about breaks even over their life.

Thanks Pennywise this is something like what I was after...but mainly just income and council tax...great effort cheers :T