‘Tax cuts mainly aid rich’
By
TORY tax cuts will benefit high earners five times more than the poorest – and cost the country £5billion, experts have warned.
Labour challenged contenders to replace Boris Johnson to “come clean” on the impact of their taxslashing plans.
But their pledges come on top of a planned 1p cut in income tax to take effect from next year – most of which will go to the richest, according to research by the Institute for Public Policy Research.
Liz Truss has made the most expensive promises – adding up to a total cost of £33.2billion a year.
Sensible
She announced this week she would cancel a planned 6p rise in Corporation tax, worth £17bn a year. And she would scrap the £12bn rise in National Insurance. She plans to scrap the ‘green levy’ on energy bills, at a cost of £4.2bn.
Penny Mordaunt has promised a £50 cut on fuel duty, while Tom Tugendhat says he has a 10-year growth plan with “targeted and sensible tax cuts”.
Kemi Badenoch, below, has refused to get into a
“bidding war” over tax cuts. Only Rishi
Sunak has ruled out fresh tax cuts until inflation is under control.
IPPR experts say half of a 1p drop in the
20% base rate would go to households with the largest incomes with just 2.6% finding its way to the poorest. It would cost the Treasury £5bn, meaning a £2.5bn bonus to those already on the highest incomes. Just £137million would go to those on the lowest.
Henry Parkes, the IPPR’S senior economist, said: “Tax cuts are an incredibly inefficient way of getting money to those who need it most.”