the tax burden under labour
DESCRIPTION
The tax burden under Labour. Carl Emmerson Christine Frayne Gemma Tetlow. Revenues since 1970–71. National income ‘after tax’. Revenue and national income growth by parliament. Revenue and national income growth by parliament. Revenue and national income growth by parliament. - PowerPoint PPT PresentationTRANSCRIPT
The tax burden under Labour
Carl Emmerson
Christine Frayne
Gemma Tetlow
© Institute for Fiscal Studies 2005
Revenues since 1970–71
30.0
32.0
34.0
36.0
38.0
40.0
42.0
44.0
46.0
48.0
50.0
70
–7
1
75
–7
6
80
–8
1
85
–8
6
90
–9
1
95
–9
6
00
–0
1
05
–0
6
09
–1
0
Financial year
Pe
rce
nta
ge
of
na
tion
al i
nco
me
Net taxes and national insurance contributions
Current receipts
© Institute for Fiscal Studies 2005
National income ‘after tax’
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
76–7
7
80–8
1
85–8
6
90–9
1
95–9
6
00–0
1
05–0
6
09–1
0
Five year average ending
Rea
l p
erce
nta
ge
gro
wth
Current receipts
National income
National income minus current receipts
© Institute for Fiscal Studies 2005
Revenue and national income growth by parliament
Annualised average real increase (%) in:
Current receipts National income National income minus current
receipts
Conservatives 18 years 1.7 2.1 2.4
1st Labour parliament
2nd Labour parliament
Labour 8 years so far
Labour current plans
© Institute for Fiscal Studies 2005
Revenue and national income growth by parliament
Annualised average real increase (%) in:
Current receipts National income National income minus current
receipts
Conservatives 18 years 1.7 2.1 2.4
1st Labour parliament 5.0 3.3 2.3
2nd Labour parliament
Labour 8 years so far
Labour current plans
© Institute for Fiscal Studies 2005
Revenue and national income growth by parliament
Annualised average real increase (%) in:
Current receipts National income National income minus current
receipts
Conservatives 18 years 1.7 2.1 2.4
1st Labour parliament 5.0 3.3 2.3
2nd Labour parliament 2.3 2.5 2.6
Labour 8 years so far
Labour current plans
© Institute for Fiscal Studies 2005
Revenue and national income growth by parliament
Annualised average real increase (%) in:
Current receipts National income National income minus current
receipts
Conservatives 18 years 1.7 2.1 2.4
1st Labour parliament 5.0 3.3 2.3
2nd Labour parliament 2.3 2.5 2.6
Labour 8 years so far 3.3 2.8 2.6
Labour current plans
© Institute for Fiscal Studies 2005
Revenue and national income growth by parliament
Annualised average real increase (%) in:
Current receipts National income National income minus current
receipts
Conservatives 18 years 1.7 2.1 2.4
1st Labour parliament 5.0 3.3 2.3
2nd Labour parliament 2.3 2.5 2.6
Labour 8 years so far 3.3 2.8 2.6
Labour current plans 3.5 2.4 1.7
© Institute for Fiscal Studies 2005
Contributions to changes in government revenue
Labour’s 1st term Labour’s 2nd term Labour to date
% GDP Cash % GDP Cash % GDP Cash
Conservative
Labour 1st term
Labour 2nd term
All announcements
Fiscal drag
Economic cycle
Other factors
Total 1.6% £19.6bn
© Institute for Fiscal Studies 2005
Contributions to changes in government revenue
Labour’s 1st term Labour’s 2nd term Labour to date
% GDP Cash % GDP Cash % GDP Cash
Conservative 0.7% £9.1bn
Labour 1st term –0.2% –£2.3bn
Labour 2nd term
All announcements
Fiscal drag
Economic cycle
Other factors
Total 1.6% £19.6bn
© Institute for Fiscal Studies 2005
Contributions to changes in government revenue
Labour’s 1st term Labour’s 2nd term Labour to date
% GDP Cash % GDP Cash % GDP Cash
Conservative 0.7% £9.1bn
Labour 1st term –0.2% –£2.3bn
Labour 2nd term
All announcements 0.5% £6.8bn
Fiscal drag
Economic cycle
Other factors
Total 1.6% £19.6bn
© Institute for Fiscal Studies 2005
Contributions to changes in government revenue
Labour’s 1st term Labour’s 2nd term Labour to date
% GDP Cash % GDP Cash % GDP Cash
Conservative 0.7% £9.1bn
Labour 1st term –0.2% –£2.3bn
Labour 2nd term
All announcements 0.5% £6.8bn
Fiscal drag 1.0% £12.4bn
Economic cycle 0.4% £5.1bn
Other factors –0.3% –£4.7bn
Total 1.6% £19.6bn
© Institute for Fiscal Studies 2005
Contributions to changes in government revenue
Labour’s 1st term Labour’s 2nd term Labour to date
% GDP Cash % GDP Cash % GDP Cash
Conservative 0.7% £9.1bn
Labour 1st term –0.2% –£2.3bn
Labour 2nd term
All announcements 0.5% £6.8bn
Fiscal drag 1.0% £12.4bn
Economic cycle 0.4% £5.1bn
Other factors –0.3% –£4.7bn
Total 1.6% £19.6bn 0.6% £6.9bn
© Institute for Fiscal Studies 2005
Contributions to changes in government revenue
Labour’s 1st term Labour’s 2nd term Labour to date
% GDP Cash % GDP Cash % GDP Cash
Conservative 0.7% £9.1bn 0.0% 0.0
Labour 1st term –0.2% –£2.3bn 0.0% –£0.5bn
Labour 2nd term 0.9% £11.6bn
All announcements 0.5% £6.8bn
Fiscal drag 1.0% £12.4bn
Economic cycle 0.4% £5.1bn
Other factors –0.3% –£4.7bn
Total 1.6% £19.6bn 0.6% £6.9bn
© Institute for Fiscal Studies 2005
Contributions to changes in government revenue
Labour’s 1st term Labour’s 2nd term Labour to date
% GDP Cash % GDP Cash % GDP Cash
Conservative 0.7% £9.1bn 0.0% 0.0
Labour 1st term –0.2% –£2.3bn 0.0% –£0.5bn
Labour 2nd term 0.9% £11.6bn
All announcements 0.5% £6.8bn 0.9% £11.1bn
Fiscal drag 1.0% £12.4bn 0.8% £9.6bn
Economic cycle 0.4% £5.1bn –0.3% –£3.8bn
Other factors –0.3% –£4.7bn –0.8% –£10.1bn
Total 1.6% £19.6bn 0.6% £6.9bn
© Institute for Fiscal Studies 2005
Contributions to changes in government revenue
Labour’s 1st term Labour’s 2nd term Labour to date
% GDP Cash % GDP Cash % GDP Cash
Conservative 0.7% £9.1bn 0.0% 0.0 0.7% £9.1bn
Labour 1st term –0.2% –£2.3bn 0.0% –£0.5bn –0.2% –£2.8bn
Labour 2nd term 0.9% £11.6bn 0.9% £11.6bn
All announcements 0.5% £6.8bn 0.9% £11.1bn 1.4% £18.0bn
Fiscal drag 1.0% £12.4bn 0.8% £9.6bn 1.8% £22.0bn
Economic cycle 0.4% £5.1bn –0.3% –£3.8bn 0.1% £1.3bn
Other factors –0.3% –£4.7bn –0.8% –£10.1bn –1.2% –£14.9bn
Total 1.6% £19.6bn 0.6% £6.9bn 2.1% £26.4bn
© Institute for Fiscal Studies 2005
Cumulative budgetary changes
-4.0-2.00.02.04.06.08.0
10.012.014.0
19
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19
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19
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20
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20
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20
01
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20
01
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20
02
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dg
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20
02
Pre
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20
03
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20
03
Pre
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Re
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20
04
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dg
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20
04
Pre
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Re
po
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£ b
illi
on
(20
05-0
6)
Election 2001
© Institute for Fiscal Studies 2005
So to conclude
• Revenues up 3.3% per year over 8 years• Faster increase going forward• Lower economic growth expected• … and without introducing new measures• Policy measures yielded 2/3 of increase so far• More might be needed in the future?
The tax burden under Labour
Carl Emmerson
Christine Frayne
Gemma Tetlow