The past is the past, but ahead of today’s probably punitive budget, here’s a moment of nostalgia.
Figures from accountants Smith Williamson show just how much the UK’s highest earners have lost from their post-tax pay packets over the past 13 years. The amounts are substantial.
In 1997, someone earning the equivalent of 200k today would have taken home 126k after tax and national insurance were deducted; in 2010 they take home 116k.
The discrepancy is even broader at higher income levels.
In 1997, someone earning the equivalent gross income of 500k today, took home a net income of 305k; today they take home 263k. Equally, someone earning the equivalent of 1m in 1997 took home 605k; today they have 508k.
The picture is even more punitive when house moves are factored in. What with rising property prices and higher stamp duty, Smith Williamson calculates that the wealthy are now spending six times more on property taxes.
In 1997, for example, stamp duty was 1% and the average person with a gross income of 1m might have purchased a house worth 2.1m. Today, stamp duty is 4% on properties worth more than 500k, and the average person earning 1m might buy a house worth 5m. As a result, their stamp duty payments have risen from 30k to 200k.
Given that taxes are likely to rise higher this afternoon, it’s probably not worth dwelling on this for too long.