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Personal Finance News – The First Five Months Of Year Is Spent Paying Taxes

by Jim ONeil on January 4, 2011

in Personal Finance News

A leading think-tank determined that during the first five months of 2011, Britons will spend each penny earned to pay taxes. Tax Freedom Day is the celebrated date when those in the country begin working to fund themselves rather than the tax man. In 2011, this day will be May 30, an extension from May 27 of this year, reported the Adam Smith Institute.

The Value Added Tax (VAT) increase is responsible for the three-day pushback from this year. On January 4, VAT will increase from 17.5 percent to 20 percent. Adam Smith Institute Executive Director Tom Clougherty believes that Britons are “desperately overtaxed.” The VAT increase affects every home within the country and will decrease consumer confidence and slow the economic recovery, he said.

The British government has made spending cuts and deficit plugs a priority, which many commend. However, the fact that Tax Freedom Day falls five months into the year illustrates the severe overtaxing of residents. Mr. Clougherty points out that spending only seven months working for themselves is not enough for Britons. It is also a sign of large and wasteful government spending.

Since 2009, Freedom Tax Day has fallen back six days. However, it is still better than the peak of the last decade, which fell in 2006 and was June 4. It is nice to know that even a worldwide recession did not force the date to that point. Although, rising prices are not doing much to make people feel better.

The new year stands to be a difficult one for Britons and in the eyes of most, May 30 cannot arrive soon enough. In the meantime, they will toil away at their jobs, bringing home paychecks that go straight to paying taxes. Once June arrives, they will finally have some cash to spend on themselves and their families.

phuongold matel

Barry's advice is sound. There is a site that's very helpful without charging you anything and gives you information on what your options are. There's another that even provides form letters to send to creditors.

The other people to talk to are your local CAB. They have a lot of information on clearing debt and can help with letters.

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