The days of tax cuts in Britain are over and the baby-boomer generation should prepare for higher wealth taxes to fund an inevitable surge in healthcare costs, the Resolution Foundation think tank said on Monday.
Workers cross the Millennium footbridge at dawn with the Shard skyscraper seen behind in London, Britain, December 19, 2017. (Photo: Reuters)
The new research showed spending on education, social security and above all health looks set to rise by 20 billion pounds a year in today’s money by the end of the next decade and by 60 billion pounds a year by 2040.
Most of the increase will be caused by spending on health as Britain’s population ages - a demographic timebomb that means the“age of tax cuts is over”, David Willetts, chair of the Resolution Foundation and a former Conservative government minister, said.
“The time has come when we boomers are going to have reach into our own pockets. The alternative could be an extra 15 (pence) on the basic rate of tax, paid largely by our kids.”
Britain has steadily brought down a budget deficit that stood at 10 percent of economic output in 2010 mostly through spending cuts for many government departments.
Baby-boomers are considered to be people who were born before the mid-1960s.
Willetts said politically difficult reforms on wealth, inheritance and local council taxes would be needed.
“Unless we act, at some point we will face a choice between changing our approach to taxation, or cutting access to the (National Health Service) and letting social care get into an even deeper crisis. We can’t delay that debate any longer.”