UK ‘Conservatives’ Stealth Tax to Take Tens of Billions More From Families Every Year

Britain's Prime Minister Rishi Sunak is greeted by Britain's Chancellor of the E
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Oliver JJ Lane

The stealth tax raid on working people by Britain’s nominally Conservative government is to take even more money than initially thought, as inflation continues to force higher taxes through a process known as fiscal drag.

The UK government is set to take an extra £40 billion a year in taxes on jobs by 2028 with a stealth tax rise that will see more workers and families dragged into higher tax brackets through frozen thresholds and soaring inflation.

This quiet raid on the nation’s finances amounts to the largest increase of taxes on income “in at least half a century”, so says the Resolution Foundation, who have calculated the amount the government is due to benefit by not fixing the tax system is outpacing earlier estimates.

This cash grab will be achieved without the government having to deal with a bad news cycle as is typical when announcing a visible tax rise. Instead, taxes will soar automatically by having arbitrary income tax bands and not adjusting them, as a just state would, as incomes rise with inflation.

The impact of this, which has been going on for decades but has reached “totally unprecedented” levels under the present Conservative administration, is best seen in the upper tax bracket, which was first created decades ago to punish the super-wealthy. Today, a failure to adjust the threshold as inflation soars has seen upper-working and middle-class occupations like teachers, nurses, and police officers dragged into the punishment band.

As late as 2003 not a single nurse in the UK paid tax in the top band, but a decade later tens of thousands did, and now hundreds of thousands do. Nurses are not meaningfully any wealthier in 2023 than 20 years ago, but they are taxed more.

By 2028, it is thought a fifth of all taxpayers will be paying the 40 per cent higher tax rate once meant only for the very wealthy.

It is believed the government may attempt to curry favour with voters before the next general election, which is expected to come in the late winter of 2024. Any feeling of relief from that is purely illusory, the Resolution Foundation warns: the amount of extra money taken from working people through the stealth tax rises is so considerable, that any cut would “pale in comparison”.

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