Corporate taxes have been hiked. Frozen thresholds have dragged thousands more into higher tax brackets. And of course, there are dozens of other levies, from stamp duty to inheritance taxes that the Chancellor has quietly used to boost Treasury receipts.But there is another tax category that has been rising just as steadily. According to the latest data from the Office for National Statistics (ONS), environmental taxes are hitting fresh records with every year that passes. Few disagree on the need to combat climate change, and green levies can be a tool to change our behaviour.\u00a0But the blunt truth is this: they have just been turned into another stealth tax by the Exchequer \u2013 and that needs to be stopped before it does any more damage to an economy that is already struggling under the weight of an over-mighty state.The UK has been putting up so many levies, and so quickly, that even some tax advisers must be struggling to keep up. The overall tax burden has risen to roughly 40pc of GDP, and is on track to reach its highest level in 70 years. Marginal rates for some people have reached 60 or 70pc.<\/p>\n
\t<\/span><\/p>\n Against that backdrop, it would be easy to overlook what has steadily been turned into the biggest stealth tax of all. The ONS this week published the latest figures for environmental taxes and they make for sobering reading.In 2023, the UK squeezed \u00a352.5bn out of the economy in green taxes, a 4.9pc increase year-on-year, and it is now close to its pre-pandemic high. The revenue raised by green taxes has almost doubled since 2000. Within that, fuel duty is by far the biggest contributor, accounting for nearly \u00a325bn.The UK\u2019s Emissions Trading Scheme \u2013 which seeks to reduce greenhouse gas (GHG) emissions in energy intensive sectors \u2013 now raises close to \u00a36bn. Air passenger duty brings in \u00a33.7bn, and the climate change levy \u2013 an environmental tax charged on the energy businesses use \u2013 close to \u00a32bn.Add it all up, and it is turning into a major burden. The average household paid \u00a3623 in green levies in 2021, up from \u00a3575 in 2020. They accounted for 5.5pc of government revenue, and took 2pc out of total GDP, in 2022. And that\u2019s before the shadow climate change secretary Ed Miliband gets to work, as he almost certainly will later this year.Under Labour, there could be an extra tax on business class air travel, as has been pushed by some environmental groups.The \u201cfull expensing\u201d regime for companies could be restricted to \u201cgreen projects\u201d, substantially increasing the amount squeezed out of companies. Capital gains tax could be increased for any investment that was not carbon-neutral. The list goes on and on. In reality, it is hard to avoid the conclusion that environmental taxes will keep on rising higher and higher.<\/p>\n \t<\/span><\/p>\n Here\u2019s the problem, however. Many economists have argued that we should impose higher taxes in order to bring down emissions. It is a blunt instrument, but it can be an effective way of changing what we buy, altering manufacturing processes, and ensuring the negative externalities from emitting carbon are tackled.But surely the money raised through environmental taxes should be offset by reductions elsewhere? That way, the overall revenue impact could be neutral, and the mechanism far less opaque. So, for example, companies might pay for emissions trading, but that would be compensated for with lower corporate taxes. Or air passenger duty could be balanced out by slightly lower income tax. Instead, it has been turned into cover for another \u201cgreen\u201d tax raid.This cannot continue forever. First, it will crush the life out of the economy. No government should expect to impose increasingly punitive levies on individuals and businesses, and to pour those revenues into a state machine with rapidly declining productivity, without it damaging the nation\u2019s prosperity.\u00a0Indeed, one reason why we haven\u2019t seen the \u201cclimate-led technological growth\u201d that would generate lots of \u201cwell-paid green jobs\u201d we keep being promised is because the entire programme is becoming a vehicle for simply increasing the tax burden.Second, it will fuel hostility towards the entire decarbonisation project. Most people want to do their bit to lower emissions. But they are understandably frustrated when bureaucrats try to force on them technologies they don\u2019t want or cannot afford, and when the Government appears to use the project to hike their taxes by stealth.\u00a0People are starting to notice, with polls indicating the public is already turning lukewarm on the 2050 net zero target.The next time Jeremy Hunt, Lib Dem leader Sir Ed Davey, Sir Keir Starmer or Ed Miliband lecture us about the need for a new environmental levy they need to tell us what taxes will be cut elsewhere to make up for it.But given the received wisdom now appears to be that tax rises are an inevitability, few will be holding their breath.<\/p>\n","protected":false},"excerpt":{"rendered":" The fact described in the text is that environmental taxes in the UK have been hitting fresh records every year, with the latest data showing a 4.9% increase in 2023, reaching close to pre-pandemic levels.<\/p>\n","protected":false},"author":6,"featured_media":11456,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[3258,256,195,186,6862,6981,3348,5281,693,33,3399,2464,2369,26,358,5784,9618,7704,2658,4548,696,415,3767,9092,7905,2294,3398,1823,5770,2753,28,839,4510,2628,4593,2836,5175,5863,5957,4753,5402,6180,9569,5612,5614,1824,840,7967,3814,9619,6001,1065,6917,1183,1182,973,8731,494,380,3438,444],"class_list":["post-11455","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-other","tag-air","tag-air-travel","tag-britain","tag-business","tag-capital-gains","tag-capital-gains-tax","tag-change","tag-charged","tag-climate-change","tag-companies","tag-corporate-taxes","tag-damage","tag-data","tag-economy","tag-energy","tag-environmental-groups","tag-environmental-taxes","tag-frustrated","tag-fuel","tag-gas","tag-gdp","tag-government","tag-growth","tag-higher-taxes","tag-impact","tag-income","tag-income-tax","tag-increase","tag-inheritance","tag-investment","tag-jobs","tag-labour","tag-lecture","tag-money","tag-office","tag-office-for-national-statistics","tag-pandemic","tag-polls","tag-productivity","tag-project","tag-projects","tag-raid","tag-receipts","tag-revenue","tag-revenues","tag-sectors","tag-starmer","tag-state","tag-statistics","tag-stealth-tax","tag-struggling","tag-tax","tag-tax-burden","tag-taxes","tag-travel","tag-treasury","tag-truth","tag-uk","tag-us","tag-vehicle","tag-zero"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"\n