The Government’s decision to cut the top rate of tax for the richest people in the country came into effect earlier this week.
The tax cut for millionaires will see 13,000 people earning over £1 million get an average tax cut of £100,000, while millions of pensioners and working people on middle and low incomes are made worse off. It is the wrong choice and it is unfair.
According to an analysis based on figures published by the independent Institute for Fiscal Studies, a one earner family with children will lose an average of £4,000 in this new financial year because of tax rises and cuts to tax credits and benefits introduced since 2010.
A breakdown of the figures shows that different family types are affected in different ways. For example, a two earner couple with children are losing an average of £1,869, a single parent in work £1,226, and a two earner couple with no children £672.
Taking into account all the changes to tax, tax credits and benefits, households in the UK will on average be £891 a year, or £17 a week, worse off in the 2013/14 financial year.
This is all on top of the income squeeze we have seen over the last three years as a flatlining economy has seen prices rise faster than wages and unemployment rise again last month.
People in work, people looking for work, stay at home mums and pensioners hit by the granny tax are all being squeezed like never before. Millions are paying more while millionaires pay less.