"Increased National Insurance Contributions (NICs) and restricted personal allowances added to the burden."
Monday, May 30, 2011
Calculation re Tax Freedom Day seems to be flawed
According to the Adam Smith Institute - and as faithfully repeated without question by the media - today, 30 May 2011, is 'Tax Freedom Day'.
30 May is the same date as they reported in 2010 but the Institute has issued a press release that suggests there is a 3 day difference! (The 3 day movement was actually from 2009 to 2010). Here is the Institute's own record of the dates over the last ten years.
I've never been a fan of this calculation of the notional day in the year when the average person has earned enough to pay his or her annual tax bill. The concept of Tax Freedom Day was developed in 1948 by a Florida businessman. The Adam Smith Institute's records of Tax Freedom Day date back only to 1963.
I've checked back and can find no reference to the 2010 date being revised. All reports show it as being 30 May - the same as this year. How odd then that The Institute explain why Tax Freedom Day is 3 days later than in 2010. Apparently it is because the government has raised VAT. The Telegraph notes that:
It seems to me that either the calculation of Tax Freedom Day is flawed - as it doesn't reflect the tax increases mentioned in the reports, or else the calculation evidences the absence of any overall increase in the taxes paid by the average person compared with last year.
What do you think?