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Think-tank brands income tax changes ‘misguided’ and ‘regressive’


Chancellor George Osborne’s moves to increase the tax-free personal allowance and raise the higher rate threshold have been condemned by the Resolution Foundation.

Osborne announced the personal allowance would reach £11,500 as part of a pledge to reach £12,500 by the end of the Parliament, while the 40p tax threshold would move from £42,385 to £45,000, with both changes coming into effect from April.

However, the moves have been slammed as “miguided” by the Resolution Foundation, which estimates that the changes will cost £2bn for 2017/18, rising to £2.6bn by 2020/21.

It says: “They are highly regressive, with over 80 per cent of the gains going to the top half of the income distribution and roughly half – 47 per cent – going to the top 20 per cent of households alone.

“Taken together with other policy announcements made by the Government since last year’s election, we estimate that households in the bottom half of the income distribution stand to lose an average of £375 a year by 2020-21, while those in the top half are set to gain by an average of £235.”

The think-tank adds: “Spending an extra £2.5bn on tax cuts that overwhelmingly benefit rich households cannot be justified, especially when lower income households are already set to fall further behind as a result of cuts to Universal Credit.”



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There is one comment at the moment, we would love to hear your opinion too.

  1. “The Resolution Foundation is a non-partisan and award-winning think-tank that works to improve the living standards of those in Britain on low to middle incomes”.

    Believe that and you’ll believe anything. Their Head Banana is none other than Torsten Bell, who was Ed Miliband’s policy chief. He joined the Foundation in September 2015 as Director. Prior to this, Torsten was Director of Policy for the Labour Party and was responsible for the Ed Stone farce. (When Milligoon stood up and told everyone that his policies were carved in stone and then about faced).

    Torsten is hardly dry behind the ears at age 32 and his co researcher Daniel Tomlinson (who also joined this Stink Tank in 2015) looks hardly old enough to shave.

    Why on earth publish this drivel, when you so evidently didn’t bother to do basic background checks yourselves.

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