As Chancellor Rachel Reeves prepares to deliver her first major Spending Review, Independent readers have weighed in on one of the thorniest issues in British politics: how to restore the UK’s fragile public finances.A new warning from the OECD urging Reeves to act quickly – with a mix of tax rises, spending restraint and welfare reform – has reignited debate about the long-term sustainability of the nation’s economy. It comes amid rising borrowing, downgraded growth forecasts, and geopolitical tensions, including Donald Trump’s revived trade war and pressures to dramatically increase defence spending.The discussion has sharpened as the government faces calls to find billions to protect benefits and pensions, while also making the country “war ready” with a potential jump in defence spending to 3 per cent of GDP. But where should that money come from – deeper cuts to services or higher taxes?In the comment section, readers explored whether the current tax system is fair, whether austerity has run its course, and if bold moves like taxing wealth, equity, or luxury goods could be part of the solution. Others warned that without more efficient public spending, no amount of tax will be enough.Here’s what you had to say:Raise taxes or continued austerityTwo choices really: either raise taxes significantly, or continue mild austerity – limits to public services spending (and quality), and small cuts here and there to welfare spending.The problem with raising taxes is we are already taxed quite heavily in the UK, and further increases will hit people’s spending and economic growth… unless, of course, only the wealthy are targeted for tax rises – but good luck with that.ChrisMatthewsMoney is not the issue – resources areIt makes no sense to discuss national spending and budgets in terms of money. That works for individuals (to whom money has value), but not for nations (since all the money possessed by one member is a liability of others… it has net zero value to the nation*). We need to talk in terms of productive/economic resources and start from the obvious point: they are finite. Allocating more resources to e.g. housebuilding (essential) means fewer available for other uses – no matter who builds the houses, public or private sector. That means we will, on average, be worse off in the short run, in terms of personal spending.Discussion in terms of money makes it all seem like our personal budgets… that leads to seriously wrong thinking.*Unless it is foreign money, which has value to the nation.much0adoWant to share your view? Add it in the comments here.Wealth inequality is getting worseBearing in mind the shift in wealth distribution:1995–1998: The top 10 per cent held 47 per cent of total wealth, while the bottom 50 per cent held 9 per cent.2020–2022: The top 10 per cent now hold 57 per cent of total wealth, while the bottom 50 per cent hold just 6 per cent.(ONS, Wealth and Assets Survey)The UK should seriously consider some form of wealth taxation. There are several economies that have this; the UK could look at how effective this form of taxation is, and what the drawbacks are.I’m not saying the UK can’t work something out for itself, but the track record isn’t great – in anything.wolfieThe poorest pay a greater share of taxTaken from the Equality Trust using ONS figures:”The poorest 10 per cent of households paid on average 48 per centof their income in tax in 2022/23. The richest 10 per cent of households, however, paid on average just 39 per cent of their income in tax.Council tax is a key source of disproportionate taxation, with the poorest 10 per cent paying 7 per cent while the richest 10 per cent pay just 1.2 per cent.Similarly, VAT hits the poorest harder, with the poorest 10 per cent paying 12 per cent while the richest 10% pay just 3 per cent.The post-tax income for the richest 10 per cent is £112,874 – over 12 times higher than the poorest 10er cent’s post-tax income of £9,651.00.”We really can’t afford to support the lifestyles of the mega-wealthy.TalkingSenseTaxes are already too highLabour has already raised taxes above what was already the highest ever level in history. Such ever-higher taxes lead to ever-lower growth, and even declining GDP. Taxes need to be cut, and health and welfare overspending cut back.MarkLook to ScandinaviaOur party system has failed.And capitalism itself has failed.But at least Scandinavian countries have the sense to employ much fairer and more humane versions of it.As the quality of life in those countries incontrovertibly proves, including their health systems, social services, benefits, and transport systems.Cyclone8Minimum wageWhat politicians avoid discussing – including Farage and Starmer – is whether taxation is equitable in the UK, and whether the UK government spending so much on top-up benefits could be reduced by raising the minimum wage and making sure it’s enforced.forumCutting benefits unacceptableCutting benefits is an unacceptable method of balancing the books. Taxing the rich is currently impossible unless done in a coordinated global way. The only things left – as we are already being ridiculously austere –are to have the middle classes carry the burden and continue to make savings via management of immigration.BigDogSmallBrainTackle public sector inefficiencyI think taxes have been raised enough, and it’s high time public sector inefficiencies are addressed. Of course, with a governing party beholden to the unions, this is very unlikely.Ian RobinsonHyper-luxury VAT could helpA 100 per cent VAT on private jets, luxury yachts, caviar, Ferraris, handbags that cost more than the average weekly shop, diamond tiaras, and hundreds of other hyper-luxuries would benefit the many and impact the few. If you can afford a third home, a fourth holiday, or a private chef, you can afford to pay a lot more in taxes.FishPappPeople want services, but not taxesThe problem, as I see it, is that people want a nice country. They want public services, clean streets, no potholes in the roads, healthcare, police, fire brigade, etc. But they don’t want to pay for it. Hence why raising taxes is political suicide.ChopperBillTax property equity to cool the marketThey could tax property equity – it would lower house prices, making them more affordable. The owners won’t be going anywhere for the sake of a few percentage points. But it needs bravery and vision. What the UK lacks is someone capable of selling it to the public.NotRedorBlueSome of the comments have been edited for this article for brevity and clarity.Want to share your views? Simply register your details below. Once registered, you can comment on the day’s top stories for a chance to be featured. Alternatively, click ‘log in’ or ‘register’ in the top right corner to sign in or sign up.Make sure you adhere to our community guidelines, which can be found here. For a full guide on how to comment click here. More
