A common and very prevalent argument among Generation X and Millennials and later generations today is that people in the UK are taxed higher now than ever before. Indeed, headlines such as the following ' Highest Taxes In 325 Years' only add to the confirmation bias on this matter...

https://www.dailymail.co.uk/news/ar...es-Labour-Budget-motorists-poll-spending.html

These sort of claims often go alongside references to VAT being only half today's level in the 70s, and claims that boomers received 'free education'.

And yet, are these 'worse taxed than ever' claims actually even true ? Well.....no. I'd like to debunk them...

First let's look at the income tax Basic Rate in the 1970s. The current basic rate is 20%...

1970-1971...41.25%
1972-1973...38.75%
1973-1975...33% to 35%
1977-1980...34% to 30%

A 20% basic rate leaves £800 out of every £1000. Whilst a 40% rate leaves £600 out of every £1000. As £800 is 33.33% more than £600, that means todays basic rate taxpayers have a massive 33.33% more take home pay as a portion of salary than a worker in the early 70s. This is the maths that all the 'worse off tax than ever' people just don't do.

The oft made argument that the current 20% VAT rate is double what it was in the 70s does not even remotely plug that gap. Firstly the argument is not even true in that before 1973 there was 'Purchase Tax' whose minimum value was actually 13%. But more to the point, VAT is on spending....and once again how you do the maths matters...

So... worst case scenario... if ALL of the take home pay of £600 of an early 70s worker was subject to VAT then you'd have had £545.45 prior to VAT and £55.55 would have been VAT at 10%

And..worst case scenario....if ALL of the take home pay of £800 of today's worker was subject to VAT then you'd have £666.66 prior to VAT and £133.34 would have been VAT at 20%

That means today's worker pays £77.79 more in VAT....but that does not even begin to fill the gap created by the fact that they receive £200 more take home pay.

That means today's worker is still £122.21 per £1000, or 12.2% better off than their counterpart in the early 70s.....by way of income tax and VAT.