Tax, football and number-puzzled radio callers

Written by Web News Editor on . Posted in Features

tax return
“New figures tell us that the richest 4,000 taxpayers in the UK, the total number of UK income taxpayers who earn more than £2million a year, pay 4.5 % of the UK’s income tax. Discuss.”
At the end of last month, HM Revenue and Customs (HMRC) released data on Income Tax Liability Statistics and shortly after, discussion around a headline statistic from the report kicked off ‘heated debate’ on a late night London’s Biggest Conversation call-in radio show.
Callers questioned why the 4,000 was so low. It didn’t seem right. Did these figures include everybody earning £2 million or more ? Who hadn’t been counted? How many of the super-wealthy were dodging UK taxes?.
One caller said that football players earning those sorts of numbers could account for most of the 4,000 so the figure must be higher.  Perceptions are ‘real’ and reading one too many headlines about overpaid players had had its intended effect. Thereafter the conversation veered off in a new direction, with a heavy focus on listing the big ‘earners’ in football, not least Rooney’s 2012 pre-tax earnings of £17.2 million.
On the plus side this wasn’t usual call-in radio fare, none of the usual “I won’t bore you with the numbers”. Callers were interested in the information in the numbers. However, they made no reference to any data and seemed to have no sense of where and how these numbers fitted into a bigger whole. Nobody seemed to understand that you can’t just look at numbers in isolation and that without any sense of the bigger picture you will soon be ‘all at sea’.
OK, not everybody has the time to read long reports but checking relevant tables, or finding a good data visualisation before calling would instantly share more of the big picture.
It’s also true that had callers been more au fait with the stats in the report, their  initial discussion would still probably have opened with consideration of the outliers such as Torres, Toure et al, as our eyes are instinctively drawn to the end of the scale, the hard-to-miss tiny or huge numbers.
Equally, knowing a bit more about the big picture might have moved discussion into other interesting areas.
Football-wise, callers could have looked at the total number of football players in the UK and how many really earn £ 2 million or more. Or at the differences between Premier League and Football League players pay.  For example in 2009/10 (the most recent figure we could find) English players’ mean average salaries hovered around the £ 1.2 million mark before bonuses, appearances etc,  players for the Championship earned £ 211,000 and League 2 players earned £ 39,000. For more information, see the Sporting Intelligence table on basic average annual pay of England’s professional players since 1984.
Tax-wise…and that was, after all, where the discussion started…callers might have looked at who is paying tax in the UK?  what percentage are the 4,000 of the total number of tax payers in the UK?  in which UK region(s) does the proportion of additional rate taxpayers exceed the UK average?, or in which country (Answer. Wales) do just one in 16 taxpayers pay the higher – 40% – rate of tax.  Given the answer to the last question, perhaps callers might have then looked at the relative income of rugby as opposed to football players…but if they continued to talk about the numbers, this would have been good.
Radio discussion is a great way of getting inside numbers and thinking about what they do and do not tell you.  However, it would be more informative and entertaining if there were fewer unchallenged numbers and more scrutiny of throw-away statistics.  Otherwise it’s a bit of fun but a waste of an opportunity to share new insight and information.
NB  The figures for ‘the average worker’s wage’ in 2009/10 in the Sporting Intelligence table seem high. They are also likely to be medians, so for comparability, the football pay figures should be medians too but we don’t have details of all players’ wages so cannot calculate this.

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