Rich still earn 40 times more than poor from budget, even after Kwasi Kwarteng U-turn

Britain's wealthiest households should still earn nearly 40 times as much in cash as the poorest in Kwasi Kwarteng's fiscal budget, even after its U-turn on the 45p rate, a leading economics think tank has calculated.
The richest 5% of households will benefit to the tune of £3,500 each on average from the September 23 mini-budget decisions, compared to £90 for the poorest fifth, the Resolution Foundation said.
And unless he makes further U-turns on the budget announcements, Mr Kwarteng will have to impose "significant spending cuts" in his medium-term budget plan on November 23 or miss its target of reducing public debt as a proportion of GDP.
Even after abandoning the 45p decision on - which handed out an average of £10,000 to the 600,000 highest earners in the world UK - Mr Kwarteng's package remains 'very regressive', said Foundation researcher Lalitha Try.
A quarter of total cash winnings from the remaining £43bn in giveaways - more £10m - will go to the top 5%, or around 1.5m households with a net income of £100,000 or more for a family of four.
In contrast, the total gain for the 15million households in the bottom half of the income distribution is just 16%, or less than £7million.
Ms Try said: "The This morning's welcome decision to abolish the tax rate has made the Chancellor's tax cuts package less focused on wealthier households.
"But the former are still the main winners, and the magnitude of the spending cuts needed to pay for them is largely unaffected.
"Despite today's turnaround, the top 5% of households still have a lot to gain from the bottom half of the combined n-income distribution.
"The Chancellor remains a long way from meeting his budget target of debt reduction at medium term, and is set to announce further significant spending cuts on November 23 as a result. ”
Removing the abolition of the 45p tax rate removed 62% of cash gains going to the top 5% of households and 54% of gains going to the top 10% rich, the Foundation said.
But rich households still earn significantly more than the poor from canceling the 1.25% increase in National Insurance on incomes above 12,750 £.

Politics Oct 3, 2022 0 62 Add to Reading List

Rich still earn 40 times more than poor from budget, even after Kwasi Kwarteng U-turn

Britain's wealthiest households should still earn nearly 40 times as much in cash as the poorest in Kwasi Kwarteng's fiscal budget, even after its U-turn on the 45p rate, a leading economics think tank has calculated.

The richest 5% of households will benefit to the tune of £3,500 each on average from the September 23 mini-budget decisions, compared to £90 for the poorest fifth, the Resolution Foundation said.

And unless he makes further U-turns on the budget announcements, Mr Kwarteng will have to impose "significant spending cuts" in his medium-term budget plan on November 23 or miss its target of reducing public debt as a proportion of GDP.

Even after abandoning the 45p decision on - which handed out an average of £10,000 to the 600,000 highest earners in the world UK - Mr Kwarteng's package remains 'very regressive', said Foundation researcher Lalitha Try.

A quarter of total cash winnings from the remaining £43bn in giveaways - more £10m - will go to the top 5%, or around 1.5m households with a net income of £100,000 or more for a family of four.

In contrast, the total gain for the 15million households in the bottom half of the income distribution is just 16%, or less than £7million.

Ms Try said: "The This morning's welcome decision to abolish the tax rate has made the Chancellor's tax cuts package less focused on wealthier households.

"But the former are still the main winners, and the magnitude of the spending cuts needed to pay for them is largely unaffected.

"Despite today's turnaround, the top 5% of households still have a lot to gain from the bottom half of the combined n-income distribution.

"The Chancellor remains a long way from meeting his budget target of debt reduction at medium term, and is set to announce further significant spending cuts on November 23 as a result. ”

Removing the abolition of the 45p tax rate removed 62% of cash gains going to the top 5% of households and 54% of gains going to the top 10% rich, the Foundation said.

But rich households still earn significantly more than the poor from canceling the 1.25% increase in National Insurance on incomes above 12,750 £.