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Do people really want to pay more tax?

Posted on 06 November 2018 by Luca Tiratelli, Research Assistant

The long history of pre-election tax cuts, a British political tradition as venerable as back-bench braying, is based on a simple assumption: people don’t like paying taxes and reward politicians who let them keep more of what they earn. 

And yet, data from NatCen’s British Social Attitudes survey (BSA) suggests that the picture is a bit more blurred than that. Indeed, when asked whether the government should “increase taxes and spend more on health, education and social benefits”, 60% of people say yes, the highest level of support for tax rises since 2002.

Tax And Spend

Source: British Social Attitudes Survey

How then to explain the electoral potency of the tax cuts unveiled by Phillip Hammond in last week’s budget? The chancellor’s decision to raise the threshold for both the basic rate of income tax and the 40p rate has gone down exceedingly well with the public, so well, in fact, that the leadership of the Labour party has felt unable to oppose the measures. Polling from YouGov shows that 84% of people think that raising the threshold for the basic rate is “a good idea”, making this the second most popular announcement of the budget, behind only the pledge to spend extra money on the NHS.

There are a few explanations of how YouGov can find such broad support for tax cuts at the same time as the BSA can find such broad support for tax rises.

The most obvious thing to point to, considering what we know about pollsters’ ability to affect the answers people give through their framing of the issue, is the wording of the questions. The BSA questions specifically explains what higher or lower taxes mean in practice (either higher or lower spending on “health, education and social benefits”), meaning that anyone who might instinctively be for lower taxes is confronted with the need to then reduce the quality of our public services, which many already feel to be poor. YouGov’s questions, by contrast, allowed people to simply think about whether they’d like a little more money in their pocket.

However, it is unlikely that this alone explains the extent of the discrepancy between what these two polls suggest about the British electorate’s views. A good point of reference in understanding this is Labour’s 2017 General Election campaign, where they achieved great success by promising to increase funding of public services by increasing taxes for the richest 5% of population.

Perhaps, people want to see investment, and they want to see tax rises, but they don’t envision those tax rises being aimed at them. BSA data from 2016 reveals that only 53% of the population describe themselves as living either “comfortably” or “really comfortably”, meaning that a vast swathe of the public doesn’t feel like they’re in a position where they could pay much more in tax. However, there is clearly a feeling that the rich could be paying more; ComRes polling from last year found that 77% wanted to increase tax on those earning over £150,000.

So if people feel squeezed themselves, but think that those richer than them need taxing more, why hasn’t there been much opposition to the increase in threshold for the 40% tax rate? Despite being a tax cut for those who earn over £50k, close to double the average wage of £28,677, there is a suggestion that people don’t really view those on £50k as being rich.

The New Statesman has reported that part of the reason the Labour party hasn’t opposed these measures is because their internal polling reveals that a salary of £50k is something that most people view as achievable.  So, even if they aren’t earning close to that sum, they don’t want to see higher taxes for those who do, as they see themselves joining their rank one day soon.

Overall then, all of this polling leaves us with two possible takeaway messages. On the one hand, people are already persuaded of the benefits of taxing the rich, and will consent to their own taxes being raised, so long as it is clearly framed as being part of an effort to improve Britain’s public realm. On the other hand, if you offer people a little bit of extra cash, they’re going to take it, and they’re not going to ask too many questions about why you’re giving their boss even more.

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