Resolution Foundation Urges Tax Hikes on Middle Earners to Fund UK Defence
Quick Brief
The Resolution Foundation thinktank has advised that the UK must increase its internationally low 'tax wedge' to finance expanded defence ambitions. According to the report, chancellor John Healey must be willing to raise taxes on middle-income earners to achieve this goal. Healey previously stepped down from Keir Starmer's government in June over concerns regarding inadequate defence funding.
What Happened?
The Resolution Foundation published a report stating that the UK's internationally low 'tax wedge' needs to rise in order to support higher defence ambitions. The thinktank directed its advice at chancellor John Healey, suggesting he must be prepared to increase taxes on middle earners to secure the necessary funding. The report follows Healey's resignation from Keir Starmer's administration in June, which occurred after he protested what he viewed as insufficient funding for defence under the former prime minister.
Why It Matters
This report highlights the ongoing political and economic tension surrounding national security financing in the UK. By suggesting tax increases on middle earners, the thinktank brings attention to the difficult fiscal trade-offs required to meet heightened defence goals.
Key Facts
- The Resolution Foundation stated that the UK's 'tax wedge' is internationally low and must rise to fund defence ambitions.
- The thinktank directed its recommendation toward chancellor John Healey.
- John Healey resigned from Keir Starmer's government in June over inadequate defence funding.
- Funding defence through this method requires raising taxes on middle earners.
Compiled from 1 outlet
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