Taxes, like death, are inevitable. But very few people have much idea of how their money is spent.
Thus the blog applauds the UK government’s decision this week to send every taxpayer a ‘receipt’ showing the key spending areas (chapter 5, for those who wish to see the detail).
The chart above shows a sample developed by The Guardian :
• It is based on someone with average earnings of £25.2k (€33.4k, $40k)
• It itemises the use made of the £5702.12 tax they will pay in 2011-12
Of course, no one example covers all taxpayers. Nor will the UK position be the same for other countries. But the table is the best guide we have.
It shows that the 2nd largest single area of expenditure is in fact “old age”, mainly state pension payments. Their cost has already risen 35% since 2006/7, according to the government.
The table highlights the core argument of our ‘Boom, Gloom and the New Normal’ ebook. The ageing of the Western BabyBoomers is causing major changes in spending and demand patterns.