Both Labour and Conservative voters in the UK expect taxes to rise, and the majority feel that higher earners should make up the deficit, reports Accountancy Daily.
Over two thirds of voters would support an Increase in the rate of income tax for those earning over £123,000 from 45% to 50% according to a YouGov poll in The Sunday Times.
Compared to a third of voters that were in favour of Increasing the basic rate of income tax from 20% to 21%. Revealing the UK would much rather have higher earners pay 5% more tax, than have the low earners pay 1% more.
Labour have suggested they will propose a 5% tax increase for high earners to fund increased public spending. While Conservatives plan to increase the high earner threshold from £50,000 to £80,000.
The lower rate of income tax has stood firm at 20% since 2008-09, while the additional rate has changed three times over that period.
The additional rate of income tax was first introduced in 2010, when the Conservative and Liberal Democrats coalition came into power as part of government austerity measures. It came in at 50% for earnings over £150,000, but was reduced to 45% from the 2013-14 tax year.
The personal tax free allowance has also seen a gradual rise in the last decade, increasing from £6,035 in 2008/09 to 12,500 in 2019/20.
The data predominately showed that people expect a rise in taxes regardless of which party comes into power. Two thirds (67%) of people believe Labour’s spending promises would require higher taxes, this was a significantly lower 46% for the Conservatives.
Ben Zaranko, research economist at IFS said: ‘Both parties’ plans would represent a sharp change in policy, and Labour’s plans are especially ambitious. The key challenge for a government seeking to deliver investment on this scale – particularly in a short timeframe – will be finding worthwhile and viable projects in which to invest.
‘Shortages in the number of suitably skilled construction workers, a dearth of ‘shovel-ready’ projects, and practical issues relating to delivery will be challenges the next government will need to think carefully about how to overcome.’
George Bull, senior tax partner at RSM said: ‘With both the Labour party and the Conservatives promising to increase public expenditure, a recent report forecasts the growth in government expenditure as a percentage of GDP.
‘We will have a much clearer idea what the impact will be once the party manifestos are available. For now, it’s an absolute certainty that – once delivered – promises to increase expenditure will have to be paid for. Borrowing seems able to cover only part of that. Growth in the economy will be crucial. Beyond that, tax increases seem inevitable.’
The YouGov poll took place between 7-8 November 2019 and had a sample of 1,598 British adults. The survey asked their opinion on manifesto proposals ahead of the 2019 general election on 12 December 2019.