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Comment: UK returns to tax and spend

The decision of the UK Labour government to revert to tax-and-spend policies, including a 50% tax rate, to restrict ballooning budget deficits and maintain public spending has illustrated the uncertain future facing individuals who prospered in the recent boom.

Their vulnerability was recently illustrated by data from the US National Bureau of Economic Research. According to researchers Jonathan Parker and Annette Vissing-Jorsensen: "The income - especially the wage income - of rich households is now more vulnerable to fluctuations than poorer households."

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