Friday, October 22, 2010

UK Cuts: Poorest pay most

The Institute For Fiscal Studies reports that the UK Coalition package of tax and benefit changes coming into force by 2014-15 is clearly regressive, including the tax increases put in train by Britain's Labour Party.

If households are ranked by spending the bottom 30% of households are all contributing more to the deficit reduction effort, as a share of their spending, than the top 10%.

Taking into account all tax and benefit changes up to 2014-15, the average loss across the bottom 30% is roughly 6% of their spending, versus just over 3% for the top 10%.

By far the biggest losers from the coalition's benefit changes will be families with children so the coalition's plan which is supposed to be "saving our children from the burden of rising national debt" is being paid for, in large part, by families and children.

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