The Guardian has a good account of recent British research into tax.
According to survey research, most people believe that the rich pay a higher proportion of their income in tax than the poor. The British public collectively estimates the poor pay around 24% of their income in tax, while the rich pay around 35%.
The truth is very different. Once you add up income tax bills, VAT bills, Council tax bills, and other taxes, the poorest actually pay around 43% of their income in tax, compared to only 35% for the rich.
This finding doesn’t really surprise me, because a milder version of it true in New Zealand, too. As I found in my book about the New Zealand Tax system, in this country both very low income and quite high income people pay roughly the same proportions of their income in tax, and both ends of the distributions pay substantially more then the people in the middle. Here’s the chart from chapter 8:
You can have this kind of tax distribution despite having personal income tax rates that go steadily up with income because of the way different people spend their money.
Because many people at the very low end of the income distribution are not householders, they have basically no expenditures that avoid GST. And because they make very little money, they also do not save much. So GST eats a full 15% of their income (sometimes more if they are dipping into previous savings).
But as people start being responsible for rent or mortgage payments, which generally comes with having a higher income, a portion of their expenditure avoids GST, bringing the tax rate as a proportion of their income down. And, as they find room in their budget to save money or spend money overseas, their exposure to GST drops again.
New Zealand is not a country where people always pay tax at a higher level as they earn more. The middle class pays less than anyone, and the poor and the rich pay at roughly similar rates.