“The rich will pay a greater share of tax”
Ed Miliband saved David Cameron by making an acclaimed speech to which the Prime Minister was forced to respond. That is the gist of my column for The Independent on Sunday today, and coincidentally a theme also explored by Matthew d’Ancona in The Sunday Telegraph and by Andrew Rawnsley in The Observer.
One of the most interesting features of Cameron’s speech (on which I commented here and here) was that it responded directly, at last, to criticism of the tax cut for the rich, announced in March to take effect next April.
There was the knockabout, making fun of Miliband’s implication that a tax cut is the government giving some of its money to the taxpayer, but there was a serious point, which George Osborne also made in his speech, but which attracted little attention: “The rich will pay a greater share of tax in every year of this Parliament than in any one of the 13 years under Labour.”
I am sure that this is right, if only because the 50p top income tax rate came in just weeks before the 2010 election, and the 45p rate will continue to raise substantial sums from the better off. (There have also been changes to Capital Gains Tax, stamp duty and higher-rate reliefs that are highly progressive, and enough to offset the regressive effect of the VAT rises.) But I would like to see the Treasury numbers on which this claim is based. I have asked the Conservative Party press office for them, but no answer yet.
The brilliant Jonathan Portes at the National Institute for Economic and Social Research has had a look at some of the data it holds and estimates that the share of total taxes paid by the 10 per cent of the population with the highest incomes has risen from about 25 per cent in 1997 to around 28 per cent now.
The nearest I can find in official documents to the information needed is table B5 in the Budget Red Book, which shows the estimated effect of tax and benefit changes between 2010/11 and 2014/15 by fifths of the income distribution (the tax changes alone are in pale grey).
I will enquire of the Institute for Fiscal Studies tomorrow, and will update when I hear back from the Conservatives.david cameron, ed miliband
Latest from Independent journalists on Twitter