Are you paying for yourself?

I have become slightly obsessed with the UK budget and how if you were running a business like the UK how you would not need to go back to the markets to ask for more money.

We have done severe economic damage to ourselves with Brexit – a topic I expect to be front and centre in the blame game this year for increasing taxes. In the second budget you can’t really blame the last government for the “black hole”, but you can blame the decision to leave EU.

On a number of levels we have made it hard for ourselves, specifically our borrowing costs which are significantly higher than our EU counterparts. France for example is in as much of an economic mess as we are, but there borrowing costs are nearly half of ours.

Looking at some of the numbers and removing the emotion – what does it cost the government for each member of the UK. I read a couple of articles and can’t find the exact one but the OBR suggests that it is approx £18,800 per person. So if you pay less than approx £20,000 per person in your household you are a net beneficiary of the UK tax system.

Obviously costs to the state change dramatically through your life but with life expectancy increasing the latter part of your life is quite expensive, pushing the burden onto “working people” to fill some of this gap.

So we really do need to reform our tax system and certainly I still feel that property taxes are ripe for changes, it is very progressive, if you have a bigger more valuable property you pay more tax. It may also correct some of the house prices and encourage single older households to downsize (if there was property to downsize to!)

I hope that reform comes in the budget but if you are asking where you sit – if you pay more than £20k in tax per year per person in your household you are at least contributing what you consume!