The road Obama wants to take us down.

(Guardian)– Nearly a million people will see their tax rates soar as the government’s austerity package kicks in this spring, potentially to as high as 83%.

Analysis from the Institute for Fiscal Studies today reveals that changes in April will drag 750,000 people into the 40% tax bracket. Meanwhile, little-publicised tax credit cuts will push the marginal rates of 175,000 working parents up above 70%. In theory, effective tax rates in Middle Britain could reach 83%, the rate that Labour levied on Britain’s top earners before 1979.

A few days after the governor of the Bank of England, Mervyn King, warned that wages were set for their longest continuous squeeze since the 1920s, the IFS exposes how the tax changes will compound the misery.

Moderately high earners with children to support will suffer particularly. For example, a worker on £45,000 with a non-working spouse and two children will be worse off by about £1,000 per year after 6 April. This is on top of the extra VAT which families at all income levels have been paying since the start of the year.