IEA Acting Director of Communications Reem Ibrahim has written for the Express reacting to reports that the Government will raise taxes in the October budget without hurting “working people”.

Reem wrote:

“Many reports are claiming that it means no tax rises on income, National Insurance, or Value Added Tax, and any increases would be targeted at big corporations and the super-wealthy. But do taxes ever just affect those at the ‘top’?

The simple answer is no. Beneath the rhetoric, what Starmer fails to understand is the fundamental difference between the impact of a tax and the incidence of the tax. The impact of a tax is how it impacts the person from whom the tax is collected – for example, whether people smoke less in response to a tax on cigarettes.

This is different to the incidence of the tax, which is specifically about who ultimately pays the tax. For example, customers ultimately pay sales taxes that are collected by businesses, because the business adds the cost to the final price of products that customers then buy.

So, the Government may claim that particular taxes only affect those with the “broadest shoulders”, but in actuality, tax rises affect lots of people that don’t directly pay it.”

You can read Reem’s full piece here.