The respected economic think tank, the Institute of Fiscal Studies, have released a sneak preview of their annual 'Green Budget', to be launched on Wednesday. What we know so far is that the IFS are saying that tax changes to be brought in in April will cost the richest tenth of households typically 3 per cent of their income, compared to 1 per cent for the general population.
The respected economic think tank, the Institute for Fiscal Studies, has released a sneak preview of their annual ‘Green Budget’, to be launched on Wednesday. What we know so far is that the IFS are saying that tax changes to be brought in in April will cost the richest tenth of households typically 3 per cent of their income, compared to 1 per cent for the general population.
Other findings include:
• 750,000 individuals are due to enter the higher rate taxpayers as a result of a reduction in the level of income at which the higher rate starts to take effect;
• Those with incomes of over £100,000 will be affected by the loss of personal tax allowances;
• Those on means-tested benefits will be worse off due to the decision to link payments to the Consumer Prices index (presently at 3.1%) instead of the Retail Price Index or the Rossi Index (presently at 4.6% and 4.8% respectively)
The IFS has described the pattern of winners and losers as complex. Left Foot Forward will be reporting on the analysis as it is unveiled.
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17 Responses to “IFS: Richest to be hit hardest by tax changes in April”
Ash
Anon & Mike – actually there’s been another change worth noting, and that’s the shift from Tax Credit increases to income tax cuts. The Tax Credits system benefited the poorest most; income tax cuts are of most benefit to those families which are already somewhat better off (generally, those with two people in full-time work). Given that the VAT hike and benefit cuts hit the poorest hardest, therefore, a general effect of the Coalition’s own tax and benefit changes will be to redistribute wealth from the bottom to the middle. (This is the same thing that happened when the 10p tax rate was withdrawn in order to cut the main rate to 20p, which I think we all agree was a Bad Thing.)
Mr. Sensible
Agreed Liz; the 10P tax rate was a mistake, but when you think of the minimum wage ETC…
BTW I think it worth reminding ourselves that the government says it’s putting I think £200 back in peoples’ pockets with its changes to the personal allowances, but I read that the government is making families £200 worse off with the changes to thresholds.