According to new research published by the Institute of Economic Affairs, businesses may respond to increased payroll taxes by reducing employee pay, impacting disposable income.
This research illustrates one of the most important principles of tax policy: the incidence of tax does not always fall on who pays it, often impacting wages.
Tom Clougherty remarked that the proposed plan to raise employer NICs shows that taxing businesses often results in lower wages for workers, contrary to promises.
The anticipated increase in National Insurance Contributions may leave employees earning £30,000 with salary reductions, leading to decreased disposable income amid a rising cost of living.
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