In the News
Fiscal Drag - One in five workers will be higher-rate taxpayers by 2027
17th May 2023
The latest IFS peek under the bonnet of the tax system has revealed the 'hidden' effects of fixing freezing tax thresholds and personal allowances. As a result of this, by 2027, 20% of the population will be higher rate taxpayers and paying the 40% tax rate.
Such a phenomenon is called fiscal drag - and is an effective way of increasing the tax take, in this case, it is argued that this is the best way to 'repair' the public finances.
It represents a remarkable change: in 1991-92, 3.5% of all adults were higher rate taxpayers. By 2027-28, it will be nearly 15%.
You might also like
Fiscal Policy (Revision Presentation)
Teaching PowerPoints
Evaluating Fiscal Policy (Online Lesson)
Online Lessons
The 2021 Budget at a Glance
3rd March 2021
Economics of Fiscal Drag
Topic Videos
Fiscal Policy - Explaining Automatic Stabilisers
Topic Videos
Fiscal Policy - Impact of Tax Rises (Revision Essay Plan)
Practice Exam Questions