Income Tax Threshold Freeze: A Quiet Tax Hike

Fiscal Drag: The Income Tax Threshold Freeze ExplainedThe upcoming budget features a freeze on income tax thresholds, a practice started by the Conservatives in 2021 and continued by Labour. This allows the government to collect more tax revenue without raising headline tax rates. By freezing thresholds, more people are pushed into higher tax brackets as wages rise, leading to fiscal drag. This effect could bring nearly four million more people into paying income tax by 2029 and move three million more into the higher forty percent tax rate. This strategy is expected to generate billions of pounds annually, providing a quiet but effective way to boost the national coffers. The Daily News Now! — Every city. Every story. AI-powered. Hosted on Acast. See acast.com/privacy for more information.