Tax cuts for wealthy planned by Boris Johnson carry huge cost

Boris Johnson, a leadership candidate for Britain's Conservative Party, reacts throughout a hustings event in Birmingham, Britain, June 22, 2021. REUTERS/Hannah McKay

Tax cuts planned by Boris Johnson, the key candidate to become Britain’s next pm, could cost around 20 billion pounds annually, according to calculations from the Institute for Fiscal Studies think tank.

Johnson, who is vying for the votes of Conservative Party members in a run-off against foreign minister Jeremy Hunt, has proposed raising the threshold at which higher-rate income tax is payable to 80,000 pounds a year from 50,000 pounds.

Cutting tax on these earnings to 20% from 40% would cost the general public finances around 9 billion pounds a year, and benefit the highest-earning 10% of Britons, the IFS said on Tuesday.