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This is known as fiscal drag. It is nothing new.
So you'd expect that over time, taxes would decrease as incomes rose higher than inflation.
But unfortunately public spending doesn't just rise by inflation. For instance the NHS traditionally gets above inflation rises. (Only paused in recent years due to the huge deficit).
This link shows the NHS budget rises in real terms, after inflation is accounted for.
The NHS budget and how it has changed
£111.7bn in 2010
£122.6bn projected this year
And just to emphasis again after a query came up on another thread, this is in 2016/17 prices so is directly comparable. |
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