Single-lever policy simulation · taxation
Income tax rate change
This report models the effect of raising income tax from 0pp (current rates) to +5pp (≈+£50bn/yr) — with every other government policy left unchanged — on the public finances, the economy, the NHS, social care and housing, projected over 10 years.
Eases Fiscal pressure, GDP strength and NHS staffing, but worsens Public satisfaction.
A single lever moved in isolation — which no real government does. Figures are modelled projections, not predictions. How the model works →
Direct effects
▼GDP strength
mild improvementWhy: Higher income tax reduces consumer spending, dampening economic activity
▼Public satisfaction
slight pressureWhy: Income tax is highly visible — changes hit household budgets directly
▼Working-age population
negligible net effectWhy: Income tax rate change has no short causal path to working-age population in the model. Any movement you see is the tail end of long chains through shared composites (fiscal pressure, public satisfaction, political risk) and will be small.
↯ Why some effects pull against the headline
- The direct effect on GDP strength points one way, but knock-on effects outweigh it — the net 10-year result is an improvement. This tension is the point, not a glitch.
Knock-on effects
Reached indirectly, as the direct effects propagate through the system. Ordering reflects how the effect spreads, not a literal sequence in time.
Model output — exact figures
Index points on a 0–100 scale. Lower is better for pressure metrics; higher is better for outcomes like GDP and satisfaction.