Should we stop dragging people into tax designed for the rich? TiM podcast

Nearly five times as many people will soon pay 40 percent tax than in the early 1990s, when that was seen as a tax bracket reserved for the wealthy, the Institute for Fiscal Studies warned this week.

It said the tax drag caused by freezing the higher tax threshold would pull 7.8 million people into its net by 2027.

The study suggested that the threshold would need to be nearly doubled from its current level, at £50,271, to nearly £100,000 to bring the tax bracket back to the level intended for it.

Alongside the report came an IFS 40 percent tax warning, saying it was no longer the preserve of high-earning professionals and now affects electricians, plumbers, teachers, nurses and more.

The taxpayer collecting 40 pence of every pound earned from a pay rise instead of 20 pence comes at a time when workers are in a hurry to stand still, with inflation just above 10 per cent.

So, is it time for the government to stop covertly taxing and using tools such as fiscal impediments – raising thresholds with inflation or wages instead?

And is it time to raise the higher rate threshold and pull people back to the base rate?

In this podcast, Georgie Frost, Lee Boyce and Simon Lambert discuss the thorny issue of taxation and who counts as rich.

The debate moves on to estate taxes – another levy aimed at the very wealthy, but now affecting the wealthy middle class. Why is IHT so unpopular when most don’t pay it and needs reform?

Plus, how much have you lost due to inflation, will you get Nationwide’s new £100 Fairer Share cap, and finally, would you buy food two years past its best before date for big savings?