The UK government may need to raise taxes on middle earners if it wants to meet its long-term defence spending target, according to a new report from the Resolution Foundation. The think tank says higher public spending on defence will be difficult to fund without asking average workers to contribute more through taxes. The report comes as Chancellor John Healey prepares for his first budget in October. Healey has said he will wait until next year's spending review before setting out a full plan to meet Labour's promise of increasing defence spending to 3.5% of the UK's gross domestic product by 2035. The Resolution Foundation estimates that reaching this goal could require about £28 billion in extra funding every year. Economists at the think tank argue that the government is unlikely to raise that amount through business taxes or wealth taxes alone. The report says the UK still places a relatively low tax burden on average earners compared with many other developed countries. It argues that countries with larger public spending usually collect more tax from middle-income workers. James Smith, the Resolution Foundation's chief economist, said the UK taxes average earners less than many international peers even after recent tax increases. He said governments that want a larger state with more public spending usually ask ordinary workers to pay a greater share of the cost. The report says there is a strong case for sharing the cost of higher defence spending across society because the benefits of national security are shared by everyone. It argues that this could include higher taxes for middle earners rather than relying only on taxes paid by businesses or wealthy households. Economists also looked at the UK's tax wedge. This measures the amount workers pay in taxes after benefits are taken into account. According to the report, the tax wedge for a single worker on an average salary is 32.4%. Although recent tax changes increased the UK's tax wedge, it still remains below the average level across the Organisation for Economic Cooperation and Development and the Group of Seven major economies. The report says workers earning around the median salary of £33,000 also face a lower tax burden than before the global financial crisis in 2008. It argues that this leaves room for future tax increases if the government wants to expand public spending. Labour has already introduced major tax changes since taking office in 2024. The Resolution Foundation says these measures increased tax revenues by about £70 billion a year. Much of that additional revenue came from higher employer National Insurance contributions and frozen income tax thresholds. The threshold freeze means more people move into higher tax bands as wages rise over time. However, Labour has promised not to increase the rates of income tax, value added tax, or employee National Insurance. The current government has said it intends to keep that promise. That commitment limits the options available to Healey as he prepares the autumn budget. The government also faces growing pressure to spend more in other areas. Rising household energy bills are expected to increase costs for many families during the winter months. Ministers are also under pressure to expand support for unemployed young people and strengthen job programs. At the same time, defence spending has become a major priority. Healey previously argued that the UK's defence budget was not receiving enough funding when he served as defence secretary before moving to the Treasury. Now, as chancellor, he must balance higher defence investment with wider spending commitments and existing tax promises. Healey is expected to present his first budget on 28 October. The government needs to find about £1.4 billion each year over the next three years to support its immediate defence investment plans. The larger challenge remains Labour's goal of reaching 3.5% of GDP for defence spending by 2035. The Resolution Foundation says meeting that target will likely require difficult choices on taxation and public spending. The debate over how to pay for higher defence spending is expected to continue ahead of the spending review and the autumn budget. The government's decisions will shape both future tax policy and long-term defence investment across the UK.