Half of Britain is a Burden on the State

MORE than half of British households make no contribution to the state because the benefits they receive outweigh their tax payments. According to a study by the Centre for Policy Studies think tank, the Treasury has over the past 30 years become dependent on a smaller and smaller proportion of taxpayers, with only the wealthiest 20% paying significantly more to the state than they receive in benefits and public services.

In 2011, 53.4% of households received more in benefits and public services — such as health and education — than they paid in taxes. In 1979, the figure was 43.1%. It had grown only to 43.8% by 2001, and then accelerated as Labour’s public spending boom, financed largely by borrowing, gathered pace.

In the first decade of the century, the number of households dependent on the state grew by 3m, as a rise in benefits such as tax credits and spending on schools and hospitals took growing numbers of middle-income families into dependency on the state.

The think tank argues that tax payments are concentrated in the richest 20% of families, who pay L20,125 more than they receive and that this cannot be sustained. The authors also say it is not sustainable for the government to continue narrowing the nation’s tax base while public spending and debt soar to cover the gap. (continue reading...)