"It's official," says The Business. "Great Britain is no longer a low-tax economy." Instead, the British are about to find themselves paying more tax than the Germans.
Figures produced by the Organisation for Economic Co-operation and Development (OECD) show that the UK's tax revenues are set to hit 42.7% of GDP this year, up from 40.7% in 1999. Conversely, Germany's tax burden is due to fall from 46.7% in 1999 to 42.1%.
Germany, for many years the "sick man of Europe", is often seen as the epitome of the sclerotic, big-government European model, says Heather Stewart in The Observer. But it has long been under pressure to squeeze public spending to comply with the rules of Europe's Stability and Growth Pact and is making a reasonable fist of doing so.
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In the UK, on the other hand, Gordon Brown has "deliberately turned on the taps" to spend on public services, with the result that the UK is now running a budget deficit of 3.2% of GDP and that last week the European Commission stepped in to call for the chancellor to rein in his spending.
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This is leaving Britain in danger of inheriting the sick man of Europe' title, says Becky Barrow in the Daily Mail. But even if we don't actually end up in any worse state than some of Europe's economies, the shift is certainly making Britain more like Europe and not in a good way, says Holger Schmieding, chief economist at Bank of America. As Britain squanders some of its post-Thatcherite advantage and the Continent embraces some reforms, it seems that, economically speaking, Brown's policies have "put Britain firmly in the European camp" rather than in America's. No wonder growth is slowing so dramatically.
One of the side effects of all Brown's spending has been increased public-sector employment, says the FT. "Of the 1.27 million extra jobs created in the UK over the past five years, 555,000 44% have been in the public sector." In all, public-sector employment is up 12.6% since 1997. Today, one in five British employees is working for the Government (or the taxpayer, depending on how you look at it), and they don't come cheap bad news for the private sector, which is forced to "generate the wealth" and then pay the taxes to pay them.
Right now, Britain badly needs foreign investors to help us pay for our surging current-account deficit, but "it is hard to see why any foreign investor would want to touch the UK economy with a barge pole", David Smith of Williams de Bro told The Business.
Patience Wheatcroft in The Times agrees. After all, she says, "global businesses can move their headquarters". And Mr Brown should note that they "might just do that", particularly given that new numbers show that British productivity has fallen yet again. It's now languishing behind that of both the EU and the US. There is no getting away from the fact that, under Brown's chancellorship, Britain's output for every hour worked has just kept on falling further behind that of the US, says the FT.
This is all a terrible shame, points out Stewart, as Brown did inherit quite a legacy. "Since 1993, the UK has grown 50% faster than the eurozone." Now it looks like our glory days are over. "With Germany poised for a long-awaited recovery, economists say the UK's long phase as Europe's star performer could be about to end."
