UK Government's Tax Cuts Fail to Benefit Workers, Critics Say
The UK government has announced a substantial cut to the National Insurance tax on workers, but the benefit will be overshadowed by existing freezes on personal tax thresholds, known as the "fiscal drag." While the tax cut will save workers money, frozen tax thresholds mean that more people will be pushed into higher tax brackets as nominal wages rise. The Office for Budget Responsibility estimates that these freezes will raise £44.6 billion by 2029, compared to the £180 million reduction from the National Insurance cut. This has led to concerns that the burden of funding future spending commitments will fall on younger workers, as the population ages and retirement grows.