Taxes must rise in the autumn if Chancellor Rachel Reeves is to meet her self-imposed borrowing rules, according to an economic think tank.The government was on track to miss the target it has set itself by £41.2bn, according to the National Institute of Economic and Social Research (Niesr).It recommended “a moderate but sustained increase in taxes” including reform of the council tax system to make up the shortfall.The government said “the best way to strengthen public finances is by growing the economy”, but the Conservatives said Labour “always reaches for the tax rise lever”.The think tank, which is not affiliated to any political party or movement, suggests the government could raise revenue through changes to the scope of VAT, pensions allowances and prolonging the freeze in income tax thresholds, which is set to end in 2028.When she became chancellor, Reeves set out two rules for government borrowing, which is the difference between public spending and tax income. The first rule was that day-to-day spending would be paid for with government revenue, which is mainly taxes. Borrowing can only be for investment.The second rule was that debt must be falling as a share of national income by the end of a five-year period.Reeves has repeatedly said these rules are “non-negotiable”.The chancellor originally promised no …
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[mwai_chat context=”Let’s have a discussion about this article:nnTaxes must rise in the autumn if Chancellor Rachel Reeves is to meet her self-imposed borrowing rules, according to an economic think tank.The government was on track to miss the target it has set itself by £41.2bn, according to the National Institute of Economic and Social Research (Niesr).It recommended “a moderate but sustained increase in taxes” including reform of the council tax system to make up the shortfall.The government said “the best way to strengthen public finances is by growing the economy”, but the Conservatives said Labour “always reaches for the tax rise lever”.The think tank, which is not affiliated to any political party or movement, suggests the government could raise revenue through changes to the scope of VAT, pensions allowances and prolonging the freeze in income tax thresholds, which is set to end in 2028.When she became chancellor, Reeves set out two rules for government borrowing, which is the difference between public spending and tax income. The first rule was that day-to-day spending would be paid for with government revenue, which is mainly taxes. Borrowing can only be for investment.The second rule was that debt must be falling as a share of national income by the end of a five-year period.Reeves has repeatedly said these rules are “non-negotiable”.The chancellor originally promised no …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
