Income tax rates need to rise by 7%

Income tax rates need to rise by 7%
Wednesday, 21 October 2009 16:53

Was the warning cry from a leading think tank today. The National Institute of Economic and Social Research (NIESR) warned that government debt could hit as much as 93% of GDP within 6 years and that an increase of 7p in the rate of income tax would be needed to reduce this massive public debt.

Martin Weale, director of the NIESR, said: "Unless these deficits are addressed, the country will go on getting poorer and poorer, and people will eventually wonder why there isn't enough money for their pensions.

If people want public spending they will have to pay for it ? or else they will have to decide to do without some hospitals, or heating in schools. I would be very surprised if it could be achieved through minor spending reductions"

Other ideas the NIESR came up with were 

  • raising the state pension age from 65 to 70 and phasing our benefits for the over-60s.
  • freezing public sector pay for five years
  • adding VAT on items that are still exempt.

More extreme policies such as these could secure the equivalent in government income of 2 per cent of GDP.

Want Super Hero Customer Service?

Get a quote