Impact of Employer National Insurance Increases

Raising employer national insurance is considered a poor tax policy, particularly due to its regressive nature and unintended consequences. While it may seem beneficial for taxation overall, the burden falls primarily on employees through reduced wages and fewer job opportunities. This kind of taxation disproportionately affects lower-income workers, as the threshold for national insurance contributions has been lowered, leading to a higher impact on those with minimal earnings. Consequently, the policy could have significant political ramifications, especially if it depresses living standards, ultimately impacting the ruling party's chances in future elections.