tax boost for rich slammed.
Byline: TORCUIL CRICHTON Westminster Editor
CHANCELLOR Philip Hammond should abandon plans to cut tax further on the rich, a think tank said yesterday.
New research reveals the Tories' tax giveaways "overwhelmingly" go to the rich.
Eighty per cent of gains from personal tax allowance and other tax giveaways totalling PS32billion a year benefit higher income households, according to a study by the Resolution Foundation.
Plans to raise the personal tax allowance (PTA) to PS12,500 and the higher rate threshold to PS50,000 will deliver a cash boost of up to PS765 per person by the end of this parliament.
But the foundation said the PTA proposal, which would cost PS17billion, should be abandoned along with PS8billion corporation tax cuts and PS7billion in fuel duty freezes.
The total more than matches the deficit of PS30billion Hammond is facing as he delivers his first fiscal statement on November 23.
The Resolution Foundation's chief economist, Matt Whittaker, said: "Around four-fifths of the PS21billion due to be spent on raising the personal tax allowance by 2020 will have actually gone to the richest half of households."
He added that there are far more cost-effective ways to support the families Theresa May described as "just managing".
Whittaker said: "By abandoning the previous chancellor's pursuit of narrowing the tax base, he can ensure the coffers are more resilient to future economic shocks.
"And if he wants to use any fiscal leeway to support the incomes of just managing families, increasing work allowances in universal credit offer a far more targeted boost to living standards than costly further increases in the personal tax allowance."