May 28 is Tax Freedom Day for the UK in 2014 Reuters

Today is Tax Freedom Day, the first day of the year when Britons stop paying tax and start working for themselves.

Calculated by the Adam Smith Institute, the London-based libertarian thinktank that works to advance classical liberal policies to create a freer, richer world, Tax Freedom Day has two purposes.

The first is informative: most people see how much tax comes out of their earnings through income tax, but fewer realise that National Insurance is just another form of income tax.

Fewer still recognize that employers' National Insurance contributions fall on workers' wages, or that (as a recent Adam Smith Institute study found) corporation tax falls mostly on workers' wages, or how much of the money they spend in the shops and at the pub is really tax.

Tax Freedom Day makes the total burden of tax clear to people in a way that is immediately understandable.

The second purpose of Tax Freedom Day is persuasive. Once people realise that almost half the year is spent paying tax, we at the Adam Smith Institute suspect that they might decide that that's too long.

We want taxes to be lower, both because the private sector tends to allocate resources less inefficiently than the state and because state spending on public services crowds out private sector innovation. Part of the argument has to involve informing the public about the true burden of taxation that the country has to bear.

Tax Freedom Day is calculated by measuring local taxes (like council tax), direct and indirect national taxes (like income tax and VAT), and national insurance contributions and expressing that as a proportion of the UK's net national income. That was 41.09% per cent in 2014, which, mapped onto the days of the year, brings us to today.

In 2013, Tax Freedom Day fell three days later than 2014, a statistically insignificant shift – it's certainly a good thing that it hasn't gotten any later, but the government is still not really doing much on the tax-cutting front.

What could the government do? If the chancellor wanted to deliver the best returns to tax cuts, he could do worse than focusing on National Insurance and Corporation Tax.

The government's raising of the income tax threshold to £10,000 has been a very good thing, reducing the burden of taxation on the low paid, but for part-time minimum wage workers workers who earn less than this, further increases to the threshold will not help.

The National Insurance contribution threshold kicks in lower than that, at £7956, so raising that to £10,000 should be the first priority to put more money in the pockets of the low-paid. In the long-run, raising both thresholds to the full-time minimum wage earnings level would give all those workers the equivalent to a 'living wage'.

On Corporation Tax, the government really has acted well, but it could go a lot further. Corporation tax falls mostly on workers' wages, making it a form of stealth income tax, with the remainder falling on capital.

Capital taxes discourage investment and are exactly the sort of tax we need to cut to promote long-term growth. Reducing the corporation tax level to 10% would require spending cuts, but these would be offset to some extent by the increased revenues that more growth and more foreign investment in Britain would create.

It's easy to ignore tax because cutting spending is so difficult, both politically and practically, but it is vitally important that we don't forget about it.

We hope that Tax Freedom Day makes the true size of the tax bill clearer to British taxpayers, and – if we're lucky – makes more of them decide that this is one bill that it would be worth renegotiating.

Sam Bowman is research director at the Adam Smith Institute.