The single most depressing number published last week was the revelation from the Institute for Fiscal Studies that 43.8 per cent of British adults pay no income tax.
The proportion has risen sharply during the past decade. As recently as the 2007-08 tax year, according to the IFS, only 34.3 per cent of British adults paid no tax.The position will worsen as the threshold rises over the next few years.
And the implications?
The implications of Mr Osborne’s deliberate hollowing out of the tax base will have severe consequences for both society and the economy. Getting on for half the adult population are now exempt from and unaffected by the single most effective tool used by the government to raise money. Getting on for half the population, then, in theory have no interest in voting for politicians promising to cut income tax because they don’t pay it; who, presumably, have no problem with politicians raising income tax rates because they don’t pay it themselves; and who, presumably, are uninterested in the cost of providing public services but only in what those services deliver.And thus, paradoxically, George Osborne is paving the way for a Labour victory in future years.