Poorest 'pay higher tax share'

The poorest householders in Britain are paying a higher share of tax and receiving a lower share of benefits than before Labour came to power, according to a right-wing think tank.

The Centre for Policy Studies on Monday published a paper by expert Charlie Elphicke in which he likened the government's policies to those of the Sheriff of Nottingham, with resources transferred from poor to rich.

The report compared direct and indirect taxes paid in 2004/05 to those paid in 1996/97.

It found that if the poorest fifth of households paid the same share of taxes and received the same share of total benefits in 2004/05 as they did in 1996/97, they would have been £531 better off.

It said the share of the tax burden on the poorest fifth rose from 6.8 to 6.9 per cent. If the share had remained the same, that income group would have paid £56 per year less.

The share of benefits received by the bottom income group has fallen from 28.1 to 27.1 per cent, a reduction of £475.

Meanwhile, the middle-income group is said to be benefiting by £613 per year, because its share of the total tax take fell from 16.9 to 16.4 per cent, and its share of benefits rose from 20.8 to 21.5 per cent.

The second richest group are also said to be "winners", better off by £847 per year. Its share of the tax burden also fell, from 24.9 to 23.9 per cent, while its share of benefits rose from 14.7 to 15.3 per cent.

The second poorest households were found to be 'losers' by £427 per year and the top bracket were down by £465 per year.