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Instead of treating Britain's tax system as taboo, let's talk about how it can work

The Observer

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June 22, 2025

We need to talk about tax and the common good. Next year all our tax revenues combined will climb to the highest level as a share of GDP for 70 years.

- Will Hutton

This proposition has become the foundation for an increasingly fierce anti-tax narrative. Taxation at these levels is unconscionable and insupportable, it is claimed. It shackles enterprise, narrows the capacity for individual choice, worsens the cost of living crisis, and darkens economic prospects. As a result, Nigel Farage's Reform UK has been able to tap into genuine, mounting grievances and present a potentially fatal threat to Labour.

It has become an economic and political imperative to challenge the idea that taxation is in itself a dark and sinister force. The future of Britain's public services, the strength of our defence and security effort, social fairness and all that contributes to the common good hangs on unpicking it. For a government that is notoriously poor at political advocacy and messaging, lacking belief and self-confidence in what it stands for, that will be hard. But the issues can no longer be dodged: too much is at stake.

Firstly, taxation as a share of GDP must be put into context. It still places Britain only marginally above the international average, still short of the 40% ratio of the Nordic countries and others. Low growth and Brexit, depressing GDP, are as important a cause as tax. Moreover, the trends in the components of taxation over time are strikingly stable.

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