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Great Britain: the new Germany
UK taxes now higher than in Germany.ITâS official: Great Britain is no longer a low-tax economy. For the first time in recent history, Germans will pay less tax than the British this year, signalling the end of an era and Britainâs 15-year dalliance with economic liberalism. I thought Britain's economic liberalism began with Thatcher in 1979. That would make it a 26 year dalliance. It is a hugely significant milestone in Britainâs renewed economic decline but one which predictably has gone completely unnoticed by Westminster and the economically-illiterate media that covers it. One of the longstanding concerns of this newspaper is that the once healthy gap between euro zone tax-and-spending rates and those of Britain is being slowly and stealthily eroded, thanks to Chancellor Gordon Brown and a belated recognition from euro zone economies that they had to slim their bloated states to survive in the global economy. Now our worst fears have come to pass. For those who still think Britain a relative tax haven and Germany a paragon of socialism, the figures are shocking, painting an economic map which most will not recognise and the government has successfully hidden. As we report on page 1 today, the share of tax and non-tax government receipts in Germany has eased significantly from 46.7% of gross domestic product (GDP) in 1999 to an expected 42.1% in 2006, according to internationally comparable and reliable figures from the independent Organisation for Economic Co-operation and Development (OECD). In the UK, the share of tax and non-tax government receipts in GDP has risen from 40.7% to a forecast 42.4%. From a gap of six percentage points in the British taxpayerâs favour just six years ago, the advantage has now swung dramatically to Germany, albeit by just 0.3 points of GDP. Mr Brownâs highly-suspect Treasury figures paint a rather different picture; but unlike those produced by the OECD they are not internationally comparable. A similar trend is true of public spending, as the OECD figures also reveal. German general government outlays have fallen from 49.3% of GDP in 1996 to 46.8% in 2005; and between 2000 and 2005 the UK share jumped from 37.5% to 45%. For 2006, the OECD expects the German share to fall to 45.7%, within striking distance of the UKâs 45.4% share. Much more at the link. Posted by: Chuck 2006-01-21 |
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