The leftist Labour Party government in Britain announced £26 billion in tax hikes as a part of its autumn budget, which will take the tax burden to an all time high over the next five years.
Chancellor Rachel Reeves, the Labour government’s top cabinet minister on the economy, unveiled Wednesday her long-anticipated budget, which will see millions of Britons see their taxes increased despite the leftist party’s promise to focus on growth and to protect workers from paying more in tax.
While Reeves did not technically raise income taxes — as it would have been a direct contradiction of the party’s 2024 election manifesto — her budget extends the income tax threshold freeze, resulting in what is known as fiscal drag, a process by which workers are brought into higher tax bands as a result of inflation or pay growth.
According to the Office for Budget Responsibility (OBR), which controversially leaked the details of Reeves’ plan prior to the announcement, the extension of the freeze announced on Wednesday will see an estimated 920,000 more workers paying the 40 per cent income tax rate by 2029-30 compared to projections in March. Similarly, some 780,000 more people will be forced into paying income tax for the first time at the lowest 20 per cent rate, The Times reported.
As a result, income tax will increase from 10.5 per cent of GDP to 11.8 per cent by 2030-31. In total, the overall tax burden will climb from 34.7 per cent to an all time high of 38 per cent of GDP by 2031 after the £26 billion in tax hikes are factored in.
The government attempted to ameliorate anger over the cost of living by announcing q £150 reduction in energy payments, and an increase to the national minimum wage, which critics warn may hurt employment numbers. In a further populist measure, the government will introduce a so-called “mansion tax” on properties worth over £2 million. However, some have warned that this will further exacerbate the exodus of millionaires from the country.
Hellbound and Down 