96% of the Public Favour More Progressive Tax System

When asked for their thoughts on what different household income groups should pay in all types of taxes, the UK public overwhelmingly favours a more progressive tax system than that which currently exists; according to new research by the Equality Trust.

In a report Unfair and Unclear, public polling conducted in partnership with Ipsos MORI revealed that 96% of people believe that the tax system should be more progressive than is currently the case.

Additionally, more than eight in ten (82%) felt households in the highest 10% income group should pay a greater proportion of their income in tax than those in the bottom 10%.

The report also finds that the public vastly overestimate how progressive the current tax system is, and are largely unaware that the current system is in fact regressive. It finds:

  • Nearly seven in ten people (68%) believe that households in the highest 10% income group pay more of their income in tax than those in the lowest 10%.

However, analysis conducted by the Equality Trust using ONS data has found that, when all taxes on income are included:

  • A household in the bottom 10% pays 43% of its income in tax, but;
  • The average household and a household in the top 10% both pay 35% – 8 percentage points less than the bottom 10%.

Duncan Exley, Director of the Equality Trust, said:

“The public are misled about this country’s tax system. They think households with the highest incomes pay more than those with the lowest, whereas the opposite is the case. Even more concerning is how little our current system matches people’s preferences on tax. There is clearly strong support for a system that places far less burden on low-income households.

“Tax plays a hugely important role in people’s lives. It can determine the affordability of basic necessities like food and bills. But it can also determine the quality of local services, healthcare and education. It is important that people are aware of who pays tax, but equally we must build a tax system that better reflects people’s preferences. That’s why we’re calling on all parties seeking to form the government from 2015 to commit to the principle that any changes in tax policy are progressive.” 

Notes to Editors

Research was conducted online by the Equality Trust in partnership with Ipsos MORI among a total of 1,036 adults aged 16-75 in the United Kingdom from 11th – 14th April 2014 via its Online iOmnibus Survey. The survey data were weighted by age, gender, region, social grade and working status to the known profile of the UK population aged 16-75.

To calculate the level of tax paid by each group the Equality Trust used the ONS Effects of Tax and Benefits data. The data available from the ONS runs from 1977 to 2011. We looked at the difference between gross income and post-tax income measuring the percentage of gross income removed through direct tax and indirect taxation. The ONS data addresses taxes on incomes and not those on capital, as there is not a valid way of estimating these taxes.  We are focusing on households in the lowest 10%, Mean and highest 10% income groups, as these are available in the ONS dataset and are the easiest to communicate to the public.