From today, you work for yourself not the taxman
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* Tax Freedom Day falls on 8th June.
* Brits work 159 days of the year solely to pay taxes.
* UK Taxpayers will fork out over £869.4bn to the Treasury this year, 43.29% of net national income.
* This is the latest Tax Freedom Day since reliable records began in 1995—and compared to earlier (less reliable) data it is the latest since the mid-80s.
* Cost of Government Day, which factors in borrowing as well taxes, is July 10th—almost a month earlier than in 2020 but 4 days later than last year.
* MPs have provided comments in support of Tax Freedom Day, recognising the need to reduce the burden on people and businesses during a cost of living crisis. It is now incumbent on the Government to lower taxes to boost growth and investment.
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** What does this mean to me?
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Tax Freedom Day is the day when Britons stop paying tax and start putting their earnings into their own pocket. In 2022, the Adam Smith Institute (ASI) has estimated that every penny the average person earned for working up to and including 7th June went to the taxman - from June 8th onwards they are finally earning for themselves.
British taxpayers have worked a gruelling 159 days for the taxman before they can start earning for themselves.
Brits' tax burden is moving in the wrong direction. Last year, Tax Freedom Day fell an entire week earlier. In the midst of a cost of living crisis, taxpayers are being burdened with even more obligations to HMRC. While the Government’s immediate interventions to help households through the crisis are welcome, the rising cost of living cannot be effectively tackled without a growing economy underpinned by low taxes.
With current trends, we can expect Tax Freedom Day to continue to fall later in the year. Using OBR growth and tax revenue projections from March 2022, Tax Freedom Day is projected to hit June 24th by 2026: the latest since at least the early 1960s, according to historical data.
** Tax Freedom Day over the past 20 years
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Tax Freedom Day is now later than anytime since 1995:
The previous peak was in 2008 before the Great Recession. Under the Conservative/Liberal Democrat coalition Tax Freedom Day stayed relatively stable, increasing slightly at the end of the Parliament.
Since 2015, the total tax burden (as a share of net national income) has increased with Tax Freedom Day creeping into June. Since 1995, the trend has been for parties of all stripes to increase the total tax burden.
Less reliable data ([link removed]) going back over the past 40 years finds that tax burdens tend to fall under Conservative governments and rise under Labour governments. Recent data revisions are unlikely to have shifted this trend, but we can’t say for certain.
We need your support...
Now, you know that we here at the ASI don't take a single penny of public money. So these 159 days set us back as well. But clearly our work and your support is even more vital if we are to turn the tide. So, now that you're working for yourself, why not convert some of that cash into a donation to our work? We appreciate all forms of support, large and small. It's easy, just click this button:
Donate to the Adam Smith Research Trust ([link removed])
** Just some of our Parliamentary backers...
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** Our coverage on Tax Freedom Day 2022
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Daniel Pryor talks to BBC News about Tax Freedom Day
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Morgan Schondelmeier features on BBC Politics Live
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ASI President Dr Madsen Pirie on GB News
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Emily Fielder appears on Julia Hartley Brewer's TalkTV show
Elsewhere...
Tax Freedom Day received plenty of print media interest. The Guardian ([link removed]) highlighted that a number of senior Conservative MPs backed our call for tax cuts, whilst CityAM ([link removed]) drew attention to the fact that this is the latest Tax Freedom Day since the 1980s. The I ([link removed]) noted that the issue of the increasing tax burden has united a number Tory MPs in support of the message of Tax Freedom Day.
Plus, Madsen Pirie was in CapX ([link removed]) , I was in ConHome ([link removed]) , Emily Fielder was in Reaction ([link removed]) and Fiona Townsley was in 1828. ([link removed])
I hope you feel we've brought attention to a really important issue - our growing tax burden. If you'd like to know more about Tax Freedom Day or how to get involved with the ASI and work like this, please reach out.
Yours,
e
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Adam Smith Institute
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