In June 2010 the OBR/government forecast a big rise in tax revenues, based on increases in CGT, top Income Tax and Stamp Duty rates, Fuel duties and much else. The country could afford to increase cash public spending, and cut the deficit, thanks to buoyant tax revenues. (All the figures here come from the official June 2010 Red Book, and the December 2012 Autumn Statement Green Book)
They said self assessment income tax, running at £22.5bn in 2008-9, would rise to £29.2 bn by 2012-13, thanks to the higher rate of tax on top incomes and growth. This autumn they are forecasting just £22.6bn for this year, almost the same as four years earlier. That is 23% below the 201o forecast.
They did say CGT would fall heavily from the £7.8bn recorded in 2008-9, to just £2.7bn this year, a fall of 65%. The December 2012 forecast is for a smaller decline to £3.7bn. This is still a fall of 52%. The higher rates have not raised additional revenue compared to pre crisis.
They said Stamp Duty Land Tax would double from £4.8bn in 2008-9, to £9.3bn in 2012-13. Instead this December they forecast £6.5bn. That still does represent a useful rise on 2008-9, a year of low transactions in the property market, but a fall of 30% compared to plan.
They forecast Fuel Duties at £30.3 bn for this year in 2010. The latest estimate is for just £26.2bn, the same as 2009-10. The government has been forced to cancel some of the rises, and the rises have made people economise more on amounts of fuel used.
Total Income Tax is running £13bn below the 2010 forecast, but VAT is up a little and National Insurance around estimate.
It looks as if the government has reached tax saturation point with many of these taxes. High Stamp duties impede transactions in the property market, where the number of sales of properties over £1m fell by 11% in the first half of 2012 compared to 2011. Fuel duties have stopped people using so much fuel, making it difficult to get more money out of fuel buyers. Capital Gain Tax receipts are forecast to fall following the rise in rate. Income Tax receipts have suffered badly from the attack on top incomes, and from the general lack of growth in pay and the economy.
Governments of all persuasions have previously kept tax below 40% of national Income. As the government nears this point it encounters substantial resistance from taxpayers to paying more. In some cases it seems the tax rates set reduce the amount of revenue collected.