Fiscal drag will equal 10% tax hike for lowest earners New research by Interactive Investor has found that fiscal drag will cost British taxpayers the equivalent of a tax increase of about 5% for most earners by 2028, and 10% for low-income earners. Alice Guy, head of pensions and savings at Interactive Investor, said: “Hidden tax rises will decimate the finances of many families over the next few years. As if the cost of living crisis wasn't enough, taxpayers are facing a massive tax grab over the next few years as tax thresholds lag behind inflation. Blistering tax rises will hit lowest earners the hardest because more of their income is tax-free.”