Effects of changes to income tax and devolved benefits in Scotland on health inequalities: a modelling study.

There is a well-understood relationship between inequalities in income and health. We assessed how changes to income tax and social security-options recently devolved to the Scottish Government-could affect income and life expectancy inequalities. We used the microsimulation model UKMOD to estimate policies' effects on household income distribution by socioeconomic deprivation, compared to baseline (Scottish income tax schedule for 2022/23). We then used the 'Triple I' (Informing Interventions to reduce health Inequalities) scenario modelling approach to estimate mortality effects for the income changes and calculated inequalities in life expectancy at birth. Scenario health impacts were determined largely by how much money they gave or took from households in the most deprived areas. Policies that increased incomes for households in deprived areas tended to reduce inequalities in life expectancy. Although we found this also applied to tax-cutting policies that increased income inequality, our estimates did not account for the public spending cuts that these costly policies would necessitate and their likely widening effect on health inequalities. Combining the best-performing (i.e. greatest positive impact) revenue-generating and revenue-spending policies we modelled-tax increases targeted at high earners and a doubling the value of social security benefits-would generate net revenue while reducing income inequality by approximately 10% and inequalities in life expectancy by 8% to 9%, but sizeable inequalities would remain. A multifaceted approach based on combinations of policies-including, but not limited to, bolder income tax measures-is required to achieve meaningful reductions in inequalities.