Danny Alexander MP, "The overall effect is that the wealthiest pay more as a share of income and in terms of cash terms towards this than other income groups. I think that gets the balance right between fairness and responsibility for tackling the deficit." But as the axe comes down, the tax goes up and it’s not just the wealthy who'll feel it. VAT, a tax on goods and services will increase by 2 and a half percent. The opposition Labour party say this will unfairly target poorer people and that cutting spending so soon endangers economic recovery.