Visualisation made with flourish.studio
The tax system needs to raise more money to support better public services, and it needs to ensure that everyone pays their fair share. But we don’t tax income from wealth at the same rate as income from work. As a result, a large minority of the top 1% of earners pay very low rates of tax - sometimes lower than people on modest incomes. At the top end, the amounts of tax paid vary widely between people with the same income, depending on the source of their remuneration, since some (investments, capital gains and so on) are taxed at much lower rates than earnings. Overall, the exchequer loses an estimated £20bn per year because of the discrepancy between headline tax rates and effective tax rates.
Explore the context
Statistics
Statistics
Substance
Substance
Stories
Stories
Surveys
Surveys
Solutions
Solutions
Explore the arguments
Benefits are falling in real terms
Benefits are falling in real terms
Disadvantage undermines people’s capabilities and opportunities
Disadvantage undermines people’s capabilities and opportunities
High levels of inequality lead to low levels of social mobility
High levels of inequality lead to low levels of social mobility
Higher levels of inequality make a wide range of social problems worse for everyone
Higher levels of inequality make a wide range of social problems worse for everyone
Levels of trust and social cohesion are low
Levels of trust and social cohesion are low
Levels of wellbeing are declining
Levels of wellbeing are declining
Millions are unable to afford decent housing 
Millions are unable to afford decent housing
Public services are often worse in deprived areas
Public services are often worse in deprived areas
Socio-economic inequality leads to environmental inequality
Socio-economic inequality leads to environmental inequality
Socio-economic inequality leads to health inequalities
Socio-economic inequality leads to health inequalities
Socio-economic inequality leads to more crime and less effective criminal justice
Socio-economic inequality leads to more crime and less effective criminal justice
Socio-economic inequality leads to political inequality
Socio-economic inequality leads to political inequality
The best way to become wealthy is to be wealthy already
The best way to become wealthy is to be wealthy already
The nature of poverty is changing
The nature of poverty is changing
The rising costs of living hit poorer households harder
The rising costs of living hit poorer households harder
The structure of our economy leads to huge regional inequalities
The structure of our economy leads to huge regional inequalities
The tax system could be designed to be more progressive
The tax system could be designed to be more progressive
There are still high levels of tax evasion and avoidance
There are still high levels of tax evasion and avoidance
Wealth inequality is much larger than income inequality
Wealth inequality is much larger than income inequality
Wealth is taxed at much lower rates than income
Wealth is taxed at much lower rates than income
Explore the other indicators
Wealth
Wealth
Poverty
Poverty
Living standards
Living standards
Secondary school
Secondary school
Higher education
Higher education
Graduate outcomes
Graduate outcomes
Executive pay
Executive pay
Equal pay
Equal pay
Low pay
Low pay
Income tax
Income tax
Housing quality
Housing quality
Health outcomes
Health outcomes
Carbon emissions
Carbon emissions
Voice
Voice
Fair treatment
Fair treatment
Fairness Index home
Subscribe
Download PDF
Contact us