General Election 2019 Stat Checks: Week Four

Questionable use of statistics and claims continued in the fourth week.

The fourth week of formal campaigning for the General Election 2019 concluded. There were various claims made by the parties and campaigners.

Tower of assumptions

Claim: Labour are proposing to tax a person with £80,000 earned income a total of £78,000.
Rating: False.
Reasoning: Ryan Bourne (Cato Institute) divided £80bn in proposed new tax revenue by 1.5m (the number of income taxpayers in the top 5%) to yield £53,000. A mean average is inappropriate here, as the income distribution is ‘right-skewed’ — few people have high incomes.

It is based on a false claim made by Labour: their manifesto involves higher direct taxes on people with incomes under £80,000 (removal of the marriage tax allowance; capital gains and dividends taxed at income tax rates).

A Conservative campaigner then applied this £53,000 figure flatly to a person with £80,000 earned income, adding to their claimed extant £25,000 taxes. This is false — income taxes are paid marginally: only income above the threshold has the rate applied.

National insurance contributions are also applied, and considered part of direct taxation.

This is an illustration of marginal income taxation. In the UK, National Insurance is also paid. (Image: Mona Chalabi)