Tax-mad Sunak is squeezing us until the pips squeak – and middle earners are hurting most

Income tax, National Insurance, capital gains tax, inheritance tax and stamp duty receipts all rocketed, as a result of his repeated stealth tax raids. HM Revenue & Customs collected an incredible £718.2 billion in the year to March 2022, a record high.

It’s like the worst days of the 1970s, when Labour Chancellor Denis Healey pledged to “squeeze the rich until the pips squeak”.

The difference is that Healey was targeting the well off, while today Sunak is squeezing everyone, but in particular middle earners.

As I reported yesterday, marginal income tax rates are now as high as 62.1 percent. Yet you don’t have to be rich to pay that.

A family of four with just one breadwinner earning more than £50,270 will pay that rate, in income tax, NI and lost child benefit.

It’s an incredible assault on our pockets.

That’s just the direct tax charge. VAT at 20 percent will then slapped on anything they buy.

Back in 1974, then Labour Chancellor Dennis Healey raised the marginal income tax rate from 75 percent to 83 percent for the highest earners.

He also charged a surtax of 15 percent on investment income, lifting the marginal tax rate to a staggering 98 percent.

Sunak is leaving the super-rich alone, perhaps unsurprisingly, given that he is one of them. Instead, he is hitting average earners, as the UK tax burden hits its highest level in 70 years.

HMRC’s tax receipts now total 30 percent of the country’s gross domestic product (GDP), up from 27 percent last year.

Last year’s increase was distorted by the effect of the pandemic, HMRC is keen to point out. However, our taxes have risen every year since David Cameron became Prime Minister in 2010.

The only exception was 2020/21, when VAT was cut to five percent for some industries in the pandemic.

READ MORE: PM steps in as UK families are facing highest tax toll in 70 years

The bill is only going to get higher, as we are yet to full the full brute force of Sunak’s raft of stealth tax attacks.

In March last year, Sunak froze income tax, capital gains tax, inheritance tax and the pension lifetime allowance for five years.

That means as incomes rise, along with property values and share prices, more of our money will go to the Treasury, year after year.

The new 1.25 percent National Insurance levy only came into force this month, and will raise another £12 billion in the year ahead.

Yet Sunak still likes to picture himself as a low-tax Chancellor, and has held out the carrot of cutting basic rate income tax to 19 percent in the final year of this Parliament.

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In other words, just before the election. He needs to do more than that to convince voters that he wants to keep our taxes down.

In Sunak’s defence, few were complaining when he was lavishing the country with urgently needed support during Covid lockdowns.

There was always going to be a bill to pay for that.

Yet the current tax onslaught comes at the worst possible time, as the cost of living goes through the roof. People are hurting. One in four cannot pay essential bills.

And our over-complicated tax system has created some vicious quirks, such as that 62.1 percent marginal tax charge on ordinary families.

The pensions lifetime allowance is another horror show, snatching 55 percent of people’s pension as punishment for saving too much.

Denis Healey always denied saying he would squeeze the rich until the pips squeaked. Sunak isn’t squeezing his rich friends at all. He’s targeting us.