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Who will David Cameron target with tax rises?

There is intense speculation this morning as to who will suffer most in the forthcoming budget which is almost certain to see UK taxes increase in the short-term. The emergency budget, scheduled for 22 June, will give us our first glimpse of which way the UK coalition government will fall with regards to tax rises. So who will suffer most?

There is no doubt that those on higher incomes in the UK will suffer most in the short to medium term with Liberal Democrat policies, regarding the protection of low income families in the UK, likely to come to the fore. While the increase in the tax free income allowance to £10,000 will take time we should see the first step towards this figure in the forthcoming budget.

How exactly this will be funded remains to be seen but David Cameron has been forced to backtrack on his early policy of reversing the Labour Party's intention of increasing national insurance payments for employees and employers. The increase for employers will be reversed with all employees will still needing to pay a higher rate for the foreseeable future. There is also intense speculation that VAT could be increased from 17.5% to 20%, something which will almost certainly hit UK economic growth in the short to medium term.

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