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Big versus Small Government

Do people in other European countries pay more income tax than people in the UK?

The table below suggests that the answer to this question is in most cases, yes. However, it's important to identify the uses to which higher tax revenues can be put. Many British visitors to our European neighbours would be able to identify the higher standard of public infrastructure (roads, railways, public transport and so on) that they experience when they are abroad.

The big boost to UK public expenditure, scheduled to come on-stream over the next two years, is possible as a result of the higher taxation revenues (and lower social security payments) that increased economic growth have produced. But income tax and other forms of direct taxation are only part of this story. Indirect taxation in the form of VAT and duties on fuel, for example, also produces more revenue to the exchequer when the economy is expanding.

Top Income Tax Rates in Europe 1998

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