Tax cuts illusory

Posted on 13 Mar 2024
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This year’s tax cuts dwarfed by last year’s increases

Analysis by the Resolution Foundation suggests that while last week's Budget will mean a net tax cut of £9bn is taking effect this year, this is dwarfed by an estimated £27bn of tax rises that came into effect last year and a further £19bn that will come in after the election. The think-tank also found that while more than three-quarters of the personal tax cuts announced in the Budget go to the richest half of households, analysis of tax and benefit policies announced in this parliament show that middle-earners “have come out on top, while taxpayers earning below £26,000 or over £60,000 will lose out.” Torsten Bell, chief executive of the Resolution Foundation, noted that the “biggest group of losers are pensioners, who face an £8bn collective hit.” The report also highlighted the scale of lost pay growth. It noted that after taking account of rising prices, the average wage will not regain its 2008 level until 2026.

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