sofa article sofa Read more When the news broke that the UK government had agreed to a tax on “premium” goods and services such as cars and electronics, many people were puzzled.

They assumed that because we had a “double taxation” system that those who earned more money were able to pay less tax.

But what about the millions of households that had paid less than their fair share?

And why were we doing this to the rich?

The government, which said it would publish its full tax and spending plan by the end of the year, had initially proposed to tax all taxable income in the UK at 50p.

But in a surprise announcement on Thursday, ministers decided to scrap the idea, leaving an estimated £40bn worth of tax in the pockets of the rich.

As the Financial Times explained: The government will also begin taxing all earnings above £1m in April, but only on those with incomes in excess of £300,000.

Those earning above £150,000 will see their tax bill reduced by 50p over two years.

The government also plans to change the way it calculates the tax rate, which will now be based on the value of an individual’s assets rather than the value added by them.

The chancellor, Philip Hammond, is expected to announce further changes to the tax system later in the week, including plans to introduce a cap on the amount of tax that can be deducted from wages and payouts to employers.

But there are still those who don’t believe the government will be able to achieve its tax reduction targets, or that the extra money will go to the poor.

The Institute for Fiscal Studies said it expected the tax cut to fall short of the £3,000 per family the government originally predicted, and that there would be a “tipping point” where many households would start to suffer.

The IFS, which is closely aligned to the government, also suggested the change would be unpopular with ordinary voters.

In a report on Thursday titled “What we know so far about tax cuts, and why we are so unhappy with them”, it said: In the long term, the UK will be worse off than it is today for most of us.

Inequality will rise as we increase the size of the state, as the wealthy will be richer, as we expand the welfare state, and as we start to redistribute wealth.

The chancellor has promised that by the year 2020 he will publish a “red-book” analysis of the effects of the cuts, which the government is now calling “The Treasury’s Red Book”.

But the Treasury has yet to produce a full report.

While there are now more people in work than ever before, there are also fewer jobs, the IFS warned, and the overall economy is now showing signs of slowing down.

“The UK’s economy has experienced a series of ups and downs since the recession, but the recession was the worst, and it is likely that the downturn will continue into the next decade,” the report said.

It said the “slight” recovery that has taken place since the financial crisis was partly because there was a reduction in inflation and that this “has been offset by an increase in unemployment”.

The Treasury said in a statement that the government would “continue to ensure that every taxpayer is able to benefit from the full range of tax relief and tax cuts”.

The IFA said it welcomed the chancellor’s commitment to reduce the tax burden on the wealthy, but said it believed that the tax cuts would have to be increased to meet the needs of the working poor.

One of the big questions facing the IFA, the report noted, is how much of the savings from the changes in the tax code will be returned to the economy.

More to come.

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