Wednesday, October 30, 2024

Institute of Economic Affairs: Tax Expert Warns: The Budget's Hidden Attack on Your Wages

Oct 30, 2024 | In an analysis of the government's latest budget, Tom Clougherty, Executive Director and Tax Policy Specialist, breaks down the concerning implications of a massive £40 billion tax increase, with £25 billion coming from employer National Insurance contributions alone. With taxes already at historic highs, Clougherty explains how these changes will likely suppress wages and reduce job opportunities across the private sector.

Despite the change in government, Clougherty identifies a troubling continuity in economic policy, with an increasingly state-centric approach to growth. He critiques the administration's heavy reliance on public spending and capital projects, arguing this comes at the expense of private sector innovation and investment – the true engines of sustainable economic growth.

Drawing from years of economic evidence, Clougherty challenges the government's claim that workers won't be affected by these tax increases. He demonstrates how employer National Insurance hikes inevitably get passed through to employees in the form of lower wages and reduced benefits, adding to existing cost of living pressures. This comprehensive analysis offers vital insights for businesses and workers alike as they navigate the implications of the new budget.