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Budget hits the poor hardest, IFS says
Wed, 08 Feb, 2012
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Budget hits the poor hardest, IFS says
Wed, 25 Aug 2010, 10:19:00
The coalition government's first Budget will hit the poor harder than the middle classes, a new report from the Institute for Fiscal Studies (IFS) says. It describes the tax and benefit changes announced in the June Budget as 'regressive', pointing out that they hit the poor harder in absolute, not just percentage terms. The IFS calculates that the poorest 60% of Britons will lose between £450 and £510 a year by 2014 while higher earners will be just £250 to £300 out of pocket. 'Low-income households of working age lose the most as a proportion of income from the tax and benefit reforms announced in the emergency Budget,' the report said. 'Those who lose the least are households of working age without children in the upper half of the income distribution. 'They do not lose out from cuts in welfare spending, and they are the biggest beneficiaries from the increase in the income tax personal allowance.' But the Treasury hit back at the IFS report saying, 'It is selective, ignoring the pro-growth and employment effects of Budget measures such as helping households move from benefits into work, and reductions in corporation tax.' Its latest report appears to demonstrate the IFS's willingness to criticise the government whoever is in power. Chancellor George Osborne frequently cited IFS criticism of the Labour government when he was in opposition.
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