British Prime Minister Boris Johnson has received support from the House of Commons for its planned tax hike, which would raise UK tax rates to their highest level ever. The additional funds generated from the raised taxes will be used to support post-pandemic programs and to enhance the nation's health care system.
Under the proposed tax hike, workers and employees in the UK will need to pay an additional 1.25% tax. It also includes a 1.25% tax increase for dividends. Portions of the revenue generated from the tax increase will be used by the National Health Service for various post-pandemic support programs. Another portion will then be used to overhaul the nation's social care system, which had struggled throughout the pandemic.
The 319 to 248 vote in the House of Commons comes just days after the plan was unveiled in Parliament. Johnson, whose Conservative Party prides itself in keeping taxes down, has faced stiff opposition - including those from his own party. Some of his party members have openly criticized Johnson for breaking their key election pledge.
Experts said the implementation of the health and social care plan still remains uncertain as it will likely still face significant hurdles. According to the Institute for Fiscal Studies, once the tax hike is implemented it will raise taxes in the UK to about 35% of the national income - its highest-ever level.
This notion has been used by Johnson's opponents, including the opposing Labor Party. The party's chancellor, Rachel Reeves, described the "tax bombshell" as "unfair." During the debate leading up to the vote Wednesday, Reeves exclaimed that the "Tories are all tax and no strategy." Tories is a British term for people upholding traditionalism and conservatism.
Johnson had previously acknowledged that the plan is a break from their election manifesto pledge of keeping taxes low. However, he said the COVID-19 pandemic had caught everyone off guard and it wasn't in anyone's plan either.
Critics of the plan have argued that the increased taxes would siphon away cash from those that are already in need of care. Others point out that only 5.4 billion pounds of the 36 billion pounds raised over the next three years will end up being used to address social care. This means that most of the funds will end up with the NHS.
