The Challenge of Low Pay

Addressing the issue of low pay and economic disenfranchisement, the discussion revolves around the proposal to raise the personal income tax allowance to approximately £20,000. While the idea aims to alleviate tax burdens for those on livable wages, it would require significant fiscal resources, with estimates suggesting an annual cost of over £50 billion. Such a drastic increase would necessitate either raising other taxes or cutting public spending, both of which present challenges in the current economic climate. Furthermore, past experiences have shown that altering tax thresholds can lead to behavioral changes that undermine revenue predictions.