This type of standard distributional analysis always misses half of the impact on the policy. It shows the *direct* impact. The *indirect* impact is usually equal in magnitude (and opposite in sign). For growth-reducing policies like the UK's the indirect is likely even larger.
The indirect effects include:
1. People in UK pay more for goods & services because of inflation/pound depreciation.
2. Many in the UK today pay more on their mortgages and other costs associated with higher interest rates.
3. Many in UK pay more in future taxes.
1. People in UK pay more for goods & services because of inflation/pound depreciation.
2. Many in the UK today pay more on their mortgages and other costs associated with higher interest rates.
3. Many in UK pay more in future taxes.
There is no unambiguous way to incorporate all of these effects into a distributional table which is why @TorstenBell (who understands and has made all these points) did what is generally done and just showed the direct effects.
But almost any way to model these indirect effects would show that most or even all of the bars for the bottom 95 percent would be negative, showing the tax policy for what it actually is: not just a regressive tax cut but redistribution from the bottom ~95% to the top ~1%.
Updating this: The third mechanism by which people pay more that I listed above was "Many in the UK pay more taxes in the future." That looks like it could be happening already. (Note when I wrote "taxes" it was shorthand for more taxes and less benefits.)
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