Boris Johnson’s pledge to raise the threshold for the top rate of income tax from £50,000 to £80,000 would cost £8bn a year and boost the incomes of the highest-earning 8% of the adult population, according to the Institute for Fiscal Studies.
The policy would take 2.5 million people out of paying higher-rate tax, more than reversing the increase over the past three decades, the tax and spending watchdog said. About three-quarters of the tax benefit would go to the highest-income 10% of households.
It’s the word “cost” in there which is misapplied. Not taxing someone, or some group, is not a cost. It might well be a reduction in the public revenues but even that is not a cost. It is, of course, a benefit. The price of government weighs more lightly upon the shoulders of the population.
It’s true that there are costs and benefits to everything, this is one of the central lessons of economics. But in order to make sense of the world around us we do have to identify which is which, which is a cost, which a benefit.
It is a benefit that the money remain fructifying in the pockets of the people. It is, therefore, not a cost.