Were we really all in it together? The distributional effects of the UK Coalition government’s tax-benefit policy changes by Paola De Agostini, John Hills, Holly Sutherland was published in November 2014.
- The poorest income groups lost the biggest share of their incomes on average (and those in the bottom half of incomes lost overall).
- In contrast, those in the top half of incomes gained from direct tax cuts, with the exception of most of the top 5 per cent – although within this 5 percent group those at the very top gained, because of the cut in the top rate of income tax.
- In total the changes have not contributed to cutting the deficit. Rather, the savings from reducing benefits and tax credits have been spent on raising the tax-free income tax allowance.
- The analysis challenges the idea that those with incomes in the top tenth have lost as great a share of their incomes as those with the lowest incomes.