Over threequarters of UK workers are willing to pay additional income tax to fund the government’s £300bn of borrowing to fund the Covid-19 response, with many labelling the move ‘a necessary evil’, a survey by AJ Bell has found
The investment platform’s poll of some 2,000 individuals saw 77% indicate their willingness to see income tax rise, with the average rise put at 3.9%, while almost a fifth indicated they would be prepared to pay an extra 5% or more in income tax.
In contrast, less than a quarter (23%) said they are unwilling to accept any rise in income tax. Getting on for two thirds (63%) accepted tax rises as a ‘necessary evil’ as a result of the pandemic.
Two thirds (67%) of those polled said everyone has a responsibility to contribute to the costs of government support schemes, and 70% thought the government was right to increase borrowing during the crisis.
When it comes to paying more tax, measures targeting dividends and capital gains were the most popular revenue raisers, cited by 37%.
Just over a fifth (22%) believe inheritance tax should be in the Chancellor’s crosshairs, while 21% backed a National Insurance increase.
Changes to the pensions regime were less popular with removing the state pension triple-lock (10%) and restricting pension tax relief (9%) the least favoured options.
Overall, the majority (85%) reported they would rather pay lower amounts over a longer period of time, than large amounts over a shorter period of time.
Tom Selby, senior analyst at AJ Bell, said: ‘While the coalition government opted for public spending cuts to tackle the deficit after the 2008 financial crash, Prime Minister Boris Johnson is reportedly reluctant to follow a similar path.
‘ If this is the case then tax rises will likely be necessary to help balance the books – and Brits appear ready to do their bit.
‘While policymakers will need to be careful not to stifle an economic recovery by hiking income tax rates too much, there appears to be general acceptance that the Covid-19 costs will need to be repaid and that tax rises are therefore a necessary evil.
‘Indeed, this may be one of the few times in history where a government could hike income tax – perhaps via a time-limited Covid-19 surcharge – without necessarily wrecking their election chances.’