August 1, 2014 Print

Stephanie Lis of the Institute of Economic Affairs, an Atlas Network partner, says, “It’s ludicrous that millions of middle earners are being dragged into higher rates of income tax,” after the Office of Budget Responsibility released information that over “10 million middle class workers in Great Britain will be put into a higher tax bracket by 2033”. IEA says the government needs to immediately raise the threshold at which earners start paying the higher rate of tax. Middle-income earners currently pay 40 percent on income over £41,865 (USD $70,481). The 40 percent bracket was initially introduced in 1989, and was only applicable to 1 in 20 workers. Today, it now affects 1 in 6, or 4.6 million people. Only 300,000 pay the top rate of 45 percent for earning greater than £150,000 (USD $252,590). Lis continued, saying “Raising the higher rate threshold should be an immediate priority for the government”, noting that the tax burden is coming at a time when “families across the country are struggling with rising living costs.” To read the article, click here. To learn more about Institute of Economic Affairs, click here.