Rishi Sunak’s stealth income tax hike is set to cost an average-earning couple £8,000 over the next decade.
Middle-income Brits like nurses and teachers will be hit hard by a six-year freeze in the £12,570 Income Tax threshold.
A “median earning” person on £33,280 a year will pay £4,040 more in Income Tax by March 2031, compared to if thresholds had risen with inflation, analysis by the House of Commons Library found.
That would cost a couple who each make a median wage around £8,000 - the equivalent of working about six weeks unpaid.
Lib Dem leader Ed Davey, who commissioned the research, said: “It is deeply shameful that the Conservative government has chosen to slash taxes for the big banks whilst hiking them for the public."
The hit is much bigger for people on a £60,000 wage - who each face paying £20,440 more in income tax by 2031.
These people make up the highest-earning 10% of taxpayers in Britain, the most recent figures show.
The real impact on all groups will be even higher - as the research did not include a six-year freeze on the National Insurance threshold.
The threshold at which people start paying Income Tax and National Insurance is being frozen until March 2028 under the Tory government.
The £50,270 level where the 40p tax rate kicks in is also being frozen to 2028, dragging millions into paying higher-rate income tax.
Rishi Sunak had laid out plans to freeze these thresholds to 2026, and Chancellor Jeremy Hunt extended the move for two years to balance the books.
But Sir Ed said: “Britain’s squeezed middle is facing a lost decade of unfair tax hikes and soaring inflation.
“Families are watching aghast as their pay cheques fall while mortgage costs soar.
“Why should the hardworking middle be forced to pick up the bill for the Conservative party crashing the economy?”
The research was based on a person whose wages rise in line with average earnings growth each year.
It modelled what would happen if income tax thresholds rose with CPI inflation each year, instead of the current freeze. It then modelled rises with inflation after 2028.
The Treasury said because the thresholds had previously risen by more than inflation for several years, people will still be better off overall than in 2010/11.
A Treasury spokesperson said: “We want to ensure that hard-working families keep more of what they earn,
“[That] is why since 2010 we have increased the tax-free allowances for both income tax and National Insurance by more than inflation, roughly doubling them in cash terms to take millions more people out of paying tax altogether.
“No-one’s take home pay will reduce as a result of these policies.
“We are also restoring the public finances in the fairest way possible while allowing the economy to grow, which is why the highest earning households will shoulder the greatest burden, and have a plan that will help to more than halve inflation next year so that household incomes go further.”
