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Now we are working 10 weeks a year just to pay our increased tax bill
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29 May 2008
Taxpayers have to work two and a half months of every year just to pay off their income tax and national insurance annual bill, according to new research.
It now takes 10 days longer for families to cover their liabilities compared with when Labour came to power in 1997.
Accountants BDO, who compiled the figures, described the increase as "staggering".
When other levies such as stamp duty and council tax are factored in, the average worker now has to work until June 2 before being free of tax.
Under pressure: News of the increased tax burden will add to Gordon Brown's problems
This day has been dubbed "Tax Freedom Day," by think tank, the Adam Smith Institute, which calculates it every year.
This year it falls seven days later than when the Labour government took power.
This effectively means the average employee has to work until the beginning of next week to help cover government spending.
Only then do we "work for ourselves".
The huge jump in the tax burden will add to pressure on Prime Minister Gordon Brown following a series of embarrassing tax policy U-turns.
A backbench revolt was triggered after Brown scrapped the 10p income tax rate in order to fund a reduction in the basic rate.
He was forced into a £2.7 billion tax cut to appease furious MPs, which will be funded through a jump in government borrowing.
The package of support did little to curb the anger of voters, who turfed Labour out in last week’s Crewe & Nantwich by-election.
Conservative Treasury spokesman Philip Hammond said: "This is yet another report saying what most of us already know - that it is ordinary families who are bearing the brunt of Gordon Brown’s decade of economic mismanagement.
"Soaring taxes are leaving families feeling the pinch. They are looking to the Government for a helping hand - but all they are getting is a kick in the teeth in the form of yet more tax hikes."
BDO Stoy Hayward Senior Tax Partner Stephen Herring said the rise in the burden came despite Brown’s 1997 promise not to increase headline income tax rates.
Instead, thousands more taxpayers are being pulled into higher tax brackets because of Mr Brown's refusal to raise thresholds in line with increasing earnings.
Mr Herring said: "Mr Brown has achieved this increase in the total tax take by increasing personal tax allowances and tax bands only in line with the Retail Price Index, while salaries have increased well in excess of inflation each year.
"This means that more people than ever before are sucked into the 40 per cent top tax band.
"This phenomenon is known as ‘fiscal drag’ and should rightly have a reputation as the most notorious stealth tax applied by all governments."
Yesterday’s study showed that the number of days the average taxpayer must work to cover rising stamp duty liabilities has doubled to four days since 1997-98.
Taxpayers are working a week longer to pay council tax liabilities that have doubled to £23.7 billion, BDO Stoy Hayward said.
Government figures show the income tax take for 2007-08 was double the level in Labour's first year of office, at over £150 billion.
The national insurance haul has reached more than £97 billion, from nearly £50 billion in 1997-98.
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