Core Viewpoint - The Institute of Directors (IoD) has called for an increase in income tax to stabilize public finances and restore credibility in the UK's Treasury, suggesting that if public spending cuts are politically unfeasible, tax increases are necessary [1][2][5]. Group 1: Tax Policy Recommendations - The IoD emphasizes that the Chancellor, Rachel Reeves, must consider raising income tax due to the financial damage from previous employer raids and the government's failure to cut spending [2][5]. - The Resolution Foundation has proposed raising £6 billion by shifting 2p from employee National Insurance contributions to income tax, while the Institute for Government suggests that tax increases should target those with average incomes [4]. - Experts indicate that breaking Labour's manifesto promise not to raise income tax may be unavoidable given the estimated public finance shortfall of £20 billion to £50 billion [5][6]. Group 2: Economic Context - The IoD, which typically advocates for lower taxation, notes that public spending and taxation are at postwar highs as a percentage of GDP, highlighting the challenging economic environment [6][7]. - The call for the first increase in the main rate of income tax since 1975 comes amid a downturn in the job market and rising inflation, exacerbated by the impact of the Chancellor's last Budget [7].