Tax revenues will keep going up over the next 50 years until they hit a rate of 41.6%, according to the government's own figures, The Times writes
The paper says the figures were burried in 2mm high size letters in an obscure document attached to the recent Pre-Budget Report, titles Long Term Public Finance Report: an Analysis of Fiscal Sustainability.
”It revealed that taxes as a proportion of national income will rise from 38.4 per cent this year to 40.5 per cent in 2026 and up to 41.6 per cent in 2056, if current policies are continued,” the paper writes
”The report also made clear that taxes will have to rise even more than planned, or spending be cut back, if the Government’s hopes of keeping the national debt below 40 per cent of GDP for the next 50 years are to be met. The Treasury’s figures show that an additional fiscal tightening of 0.75 per cent of GDP — equivalent to a tax rise of £10 billion in today’s money — will be needed from 2013 onwards.”
One of the reasons for the required increase in government expenditure will be longevity coupled with wealth. Both are forecast to increase over coming decades, but this will bring with it demands for ever increasingly expensive medical treatments, according to consultancy PricewaterhouseCoopers, which analysed the report.
HM Treasury says through a spokesperson the UK still has a tax take well below the ”EU 15 average”.
RISING STOCK MARKETS helped pension schemes in the UK cut their deficits, and chances are they will succeed in doing so again through 2007, reports the Guardian
Consultant Watson Wyatt says in a new report the FTSE 100 shortfall shrunk by £20.5bn to 39.9bn through the past year, despite a collapse in long-term government bond yields.
The consultant adds if equities markets continue to show strength in 2007 aggregate deficits will reduce further. Improvements are also expected from yields on government debt if interest rates rise early next year as may expect.
COUNTING OF A different kind is reported by The Daily Telegraph which says civil servants are touring the country´s shopping centres handing out cards advising people on how to calculate discounts received during the New Year´s sales.
The paper says the government rejects criticism its latest move is recognition its education policies are failing to produce citizens with the required basic understanding of percentages for working out whether they are getting a good deal or not.
Such evidence includes the view of retailers shoppers have no problems understanding a sale sign offering ’1/2 price’ as compared with ’50% off’, which more poeople do not.
The Telegraph says the civil servants involved are looking to hand out 100,000 ’sales calculators’ to shoppers around the country.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Jonathan Boyd on 020 7484 9769 or email [email protected].IFAonline
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