IFS Warns of UK Tax “Punishing” Success
The Institute for Fiscal Studies (IFS) has warned that the government should identify further sources of tax rather than relying on taxation of the country’s high-earners. According to the IFS, the current strategy is an unsustainable method of supporting the UK’s economy and a way of punishing success.
Currently, just short of 30% of all income tax is paid by the country’s 300,000 highest-earning people. Those same people account for around 7.5% of the total UK tax revenue.
The IFS has warned that relying so heavily on tax revenue from the highest-earning individuals could encourage them to look for tax loopholes or to emigrate to countries offering a more favourable tax situation.
Alternatively, the IFS claims, the policy could simply diminish their fortunes and reduce their ability to cover such a large portion of the nation’s tax income.