Doubling down: Why increasing the personal tax allowance yet again is still poor value for money
Budget week: Why increasing the personal tax allowance (again) would be poor value for money (still)Article
There is now a fair bit of well-informed budget speculation in the air. One of the more likely measures is a further increase in the personal tax allowance (PTA). Both Coalition parties are committed to increasing the PTA in the next parliament, and cutting taxes before an election is always a popular move among politicians. So a mooted further rise in the PTA from the currently planned hike to £10,600 in April to £11,000 seems like an eminently plausible feature of this week's budget announcement.
Using the IPPR tax-benefit model, we estimate that this would cost £2.1 billion a year. Assuming that the chancellor also proceeds with increasing the higher-rate tax threshold by 1 per cent as planned, the distributional impact across families (rather than individual taxpayers) looks like this:
Related items
Taken to heart: Inequalities in heart disease in Scotland
More than 7.6 million people across the UK live with cardiovascular disease (CVD), around twice as many as live with Alzheimer’s disease and cancer combined.Skills passports: An essential part of a fair transition
This month, government will publish its Clean Energy Workforce Strategy. This plan covers two aims. First, filling the growing demand for skills in clean energy industries is essential to keep on track to reach the government’s clean power…Fixing the leak: How to end the £22 billion annual taxpayer losses at the Bank of England
The Bank of England increased its interest rates over recent years, aimed at reducing inflation. But this has also had an unintended effect on the Bank of England’s massive government bond buying – ‘quantitative easing’ – programme.