Proportionally, the top 1% are contributing more in income taxes

Published: 19th Jun 2014

On the weekly Call Clegg session on LBC radio this morning, Deputy Prime Minister Nick Clegg was asked for a reaction to reports this morning that numbers in poverty have doubled over the past 30 years.

Mr Clegg responded by claiming that the richest are paying more now than they have done under any other government.

We've looked into a similar claim before when Mr Cameron compared the amount of tax that the top 1% are paying now to the amount they paid under the previous government. Since Mr Clegg's claim refers to a much longer timeframe, we've asked his press team to confirm which measure he's referring to and we'll write another update when we've heard back.

In terms of the proportion of the government's takings from income tax, the top 1% contributed 28% in 2013/14. This number is expected to fall back to 27% in 2014/15. But there has been a long term increase, back in 1999 the top 1% contributed 21% of total income.

Similarly, the bottom 50% are contributing less in proportion to the highest earners. They gave the Treasury 12% of its takings from income tax in 1999 and are only expected to put in 10% this year.

Income tax contribution

But, if we look at what each income group is contributing from their own pockets, it suggests not much has changed. After earnings, minus taxes and plus benefits, the top 10% currently walk away with 70% of their original income (their 'disposable income'). Back in 1980, they took home 69% of their original earnings. We've got more on this in our factcheck.

The current top rate of 45% is higher than throughout most of the previous government - the terms in which Mr Cameron's claim was made. It was 40% since 1988 right up until 2010 when the Brown government introduced the 50p rate. But, if we're talking about any other government before this then it can't be said that this is one of the highest rates - for example, according to the Institute for Fiscal Studies, the top rate of tax in 1974 was 83%.

We'll write again when we've heard back from the Lib Dems about which measure they were using.

We're also looking into the claims reported in the papers about the findings of the report on levels of poverty.


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