George Osborne holds freshly minted coins during a visit to the Royal Mint in Llantrisant, Wales on March 25, 2014. Photograph: Getty Images.
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"Tax Freedom Day" comes earlier for the rich than the poor

The day when someone in the richest 10 per cent stops contributing to tax is nearly a month earlier than someone in the poorest 10 per cent. 

Today the Adam Smith Institute is marking this year’s "Tax Freedom Day". For those unfamiliar with the concept, "Tax Freedom Day" is defined as "the day when average Britons stop working for the Chancellor and start working for themselves". In other words, tomorrow marks the day where every penny you earn goes straight into your pocket, and not to the pesky taxman. Sounds good right? Well it gets even better. This year your "freedom" comes three days earlier than last year, three whole days.

If you’re not cartwheeling round the room at this unexpected financial boon, it’s possible you’ve worked out that Tax Freedom Day is, in fact, utterly meaningless. The celebratory nature of the Day only highlights that it is an obvious and cynical wheeze, intended to frame tax, in all forms, as a malign force. Tax is no longer a mechanism to provide your children with an education, to protect you from illness, or to make sure the roads are paved. Instead it is an imposition, the government taking what is rightfully yours.

The concept of Tax Freedom Day becomes even more bizarre when you examine how it is measured. According to the Adam Smith Institute it is "calculated by comparing general government tax revenue with Net National Income (NNI). The total of all government tax revenue – direct and indirect taxes, local taxes and National Insurance contributions – is calculated as a percentage of NNI at market prices. This year it comes to 41.09%. That percentage is then converted to days of the year, starting from 1 January."

In other words, the date of Tax Freedom Day is found by determining the fraction of the UK economy "captured" by taxation. This fraction is then used to determine a date in the calendar that is an equivalent fraction of the year.

The question is, does this method work, and can it really measure when an "average taxpayer" can expect to be "free" of taxation? The answer is, not really. For a start, nations clearly don't pay personal income tax.

Despite this, a more relevant Tax Freedom Day can be worked out. More precisely, Tax Freedom Days can be worked out. Equality Trust analysis has found that when all taxes on income are taken into account, the richest 10 per cent pay 35 per cent of their income in taxes. However, the poorest 10 per cent actually pay more – 43 per cent. Taken as a fraction of the year, this means that the day someone in the richest 10 per cent stops contributing to tax, or their "Tax Freedom Day", is actually on 9 May. The poorest on the other hand are still waiting for their Tax Freedom Day, which will not come until 5 June, nearly a month after the richest 10 per cent. 

In this sense, Tax Freedom Day can actually teach us something. By at least one important measure, our tax system is still hopelessly regressive. People may not always find themselves hugely motivated by the prospect of paying tax, but it is an important and widely accepted part of our life. We pay tax to receive certain public services, many of which have a social value far greater than their financial cost. Tax Freedom Day seeks to pervert this obvious truth by convincing the public that tax only harms them, and that it can be avoided without cost. What we need is not to demonise all forms of taxation, but to have a clear and honest public debate on whether our tax system is fair, whether it protects the most vulnerable in society, and whether it really places the greatest burden on those with the broadest shoulders.

John Hood is media and communications manager at The Equality Trust, where this piece originally appeared. 

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Donald Trump's healthcare failure could be to his advantage

The appearance of weakness is less electorally damaging than actually removing healthcare from millions of people.

Good morning. Is it all over for Donald Trump? His approval ratings have cratered to below 40%. Now his attempt to dismantle Barack Obama's healthcare reforms have hit serious resistance from within the Republican Party, adding to the failures and retreats of his early days in office.

The problem for the GOP is that their opposition to Obamacare had more to do with the word "Obama" than the word "care". The previous President opted for a right-wing solution to the problem of the uninsured in a doomed attempt to secure bipartisan support for his healthcare reform. The politician with the biggest impact on the structures of the Affordable Care Act is Mitt Romney.

But now that the Republicans control all three branches of government they are left in a situation where they have no alternative to Obamacare that wouldn't either a) shred conservative orthodoxies on healthcare or b) create numerous and angry losers in their constituencies. The difficulties for Trump's proposal is that it does a bit of both.

Now the man who ran on his ability to cut a deal has been forced to make a take it or leave plea to Republicans in the House of Representatives: vote for this plan or say goodbye to any chance of repealing Obamacare.

But that's probably good news for Trump. The appearance of weakness and failure is less electorally damaging than actually succeeding in removing healthcare from millions of people, including people who voted for Trump.

Trump won his first term because his own negatives as a candidate weren't quite enough to drag him down on a night when he underperformed Republican candidates across the country. The historical trends all make it hard for a first-term incumbent to lose. So far, Trump's administration is largely being frustrated by the Republican establishment though he is succeeding in leveraging the Presidency for the benefit of his business empire.

But it may be that in the failure to get anything done he succeeds in once again riding Republican coattails to victory in 2020.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.