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Fifteen years ago, 78% of personal income tax was paid by 32% of taxpayers. Now 80% of all personal income tax is paid by 25.7% of taxpayers. This is an unsustainable picture, with the personal income tax to GDP ratio now at 10%, significantly higher than the Organisation for Economic Co-operation and Development average of 8%. It is not unsustainable only because it is high relative to other countries. It is unsustainable because, as economists and taxpayers know well, there is only so much tax individuals are prepared to pay before they look for ways of evading payment. In economics, this is described by the Laffer Curve, which illustrates the premise that the more an activity is taxed the less revenue it generates. In everyday parlance it is known as being gatvol. That middle class and wealthy taxpayers are genuinely gatvol was illustrated in a graph circulated ahead of the budget by accounting firm PWC. The graph, which illustrates the main budget tax to GDP ratio, shows that de...

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