Magazine article Public Finance

Public Spending Policies 'Must Prioritise Poor'

Magazine article Public Finance

Public Spending Policies 'Must Prioritise Poor'

Article excerpt

The government should exhaust every form of progressive taxation before reducing public spending, or it will risk passing a disproportionate amount of pain on to people on low incomes, a triink-tank has said.

In a report released on June 18, the Resolution Foundation, which spécialises in policy for low earners, also argued that the best way to protect the worst-off was to return the economy to sustainable growth.

What's the damage compared various methods of cutting the fiscal deficit and the effects they would have on the poor. It acknowledged that while some would be necessary, spending cuts hurt those on low salaries the most.

It also warned against ring-fencing entire departmental budgets, arguing instead to protect programmes that would promote future growth.

Raising Capital Gains Tax to the same level as Income Tax would generate £3bn, the study found, which would protect low earners better than raising the same amount through removing VAT reductions on items such as fuel. …

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