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Analysis shows Britain's tax reform plan disproportionately benefits high earners | political news

Analysis shows Britain's tax reform plan disproportionately benefits high earners |  political news
Analysis shows Britain's tax reform plan disproportionately benefits high earners |  political news

 


The UK Reform Party bills itself as a party “for the left”, but its flagship tax policy disproportionately benefits high-income earners, Sky News has analyzed.

Nigel Farage has welcomed plans to raise the threshold at which workers start paying tax from £12,571 to £20,000, saying it would result in millions of low-paid workers not paying tax entirely.

But the reform's plan to raise the higher tax threshold from £50,271 to £70,000 would amount to a tax cut worth almost £6,000 for the top 10% of earners, largely overshadowing the benefits for the lowest earners.

The top 10% of households by disposable income spend £3,000 a month after housing costs, council tax and direct tax. A couple in this category would spend £5,290.

These people will gain almost £5,983 in disposable income each year as a result of the change.

The bottom 10% of households have less than £693 to spend on things like heating and food each month. For a couple this figure rises to £1,195. This household will gain an extra £221 per year.

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Despite huge disagreements, Reform UK has repeatedly described this as a minimum wage policy.

Speaking at the party's manifesto in South Wales, Mr Farage said: “I think the most innovative policy we have put forward here is to raise the level at which people start paying tax to £20,000 a year.”

“Why? First of all, it would take all seven million people out of the tax system, which is an incredibly complex tax system. Of course, that would be a good thing for low-wage people.”

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When challenged, Mr Farage argued that lower income earners would benefit more than higher earners if the tax break was considered part of total pay. But that's not the case.

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2:07 Will Nigel Farage join the Conservative Party?

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This change represents a 2.3% increase in disposable income for the bottom 10% and a 6.4% increase for the second highest income group.

The cost to the public finances will be around £59 billion. The top 10% of households will receive 28p per £1 spent, while the bottom 10% will receive just 2p.

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“These tax cuts are expensive and will disproportionately benefit those with the highest incomes,” said Dr Jamie O’Hallaran, a senior fellow at IPPR, a left-leaning think tank that conducted the study. said.

“This is deeply irresponsible at a time when public services and household finances are under so much pressure. Opinion polls show this is not what the public wants.

“Voters are calling for public services that work, not tax cuts for the top 10%.”

Sources

1/ https://Google.com/

2/ https://news.sky.com/story/reform-uks-tax-plans-disproportionately-benefit-high-earners-analysis-shows-13156776

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