The IMF warned incoming UK prime minister Andy Burnham that hiking the top
income tax rate would curb employment and harm the economy, and said higher
taxes on lower‑income groups would be a preferable alternative. In its annual
Article IV assessment it said VAT and property taxation are already above
international averages and wealth taxes are hard to collect, while overall
labor tax receipts remain slightly below G7 peers but account for nearly half
of government revenue, making labor taxation a clear adjustment lever. The IMF
cautioned that further tax increases on high earners could be counterproductive
because their tax burden is already heavy and scope to raise rates is limited.
