From the TUC

VAT rise will increase inequality – say ONS

16 Jun 2011, by in Society & Welfare

New ONS data out today considers the impact that taxes have on income inequality. Key findings are (as Richard has previously explored in some detail):

  • cash benefits play the largest part in reducing income inequality (including child benefit (currently frozen for three years) and housing benefits (soon to be subject to significant reductions)
  • over recent decades taxes have had no net impact on inequality because indirect taxes (for example VAT) are regressive so have offset the progressive impact of direct taxation.

The likely impacts of the Government’s chosen package of austerity measures couldn’t be clearer.

One Response to VAT rise will increase inequality – say ONS

  1. Jamie Jenkins
    Jun 16th 2011, 9:00 pm

    You can view the short video podcast explaining this story on the ONS YouTube channel –