Presentation on theme: "Developments in tax policy since Meade John Kay The Mirrlees Review, Cambridge, 13 April 2007."— Presentation transcript:
Developments in tax policy since Meade John Kay The Mirrlees Review, Cambridge, 13 April 2007
A rise in the role of general consumption taxes VAT is the most important modern tax innovation. Its particular strength is that it is ideal for an era in which the costs of monitoring transactions has fallen and the cost of making judgment calls has risen. Developments in tax policy since 1978
Flattening of rate structures Increasingly wide recognition that multi- rate structures contribute much to complexity but little to progressivity. Should be distinguished from flat tax campaigns which have only transitory impact.. Developments in tax policy since 1978
Growth of personal savings accounts Development of EET and TEE regimes at the individual level, leading to simplification and the deinstitutionalisation of savings. The result of recognition that income from savings is increasingly the result of life cycle decisions rather than the production of venture income. Developments in tax policy since 1978
Relatively less income tax Almost all countries have, and need, three broad based taxes (income, payroll, expenditure) but the first has declined relative to the second and (especially) the third. Partly the result of the life cycle issue, partly the increasing complexity of capital income. Developments in tax policy since 1978
Developments in tax policy in Britain since 1978 The rise and fall of fiscal neutrality The most firmly intellectually based of these changes. Has declined with more wheezes, micro-management and a resurgence of the belief that the tax structure can be usefully directed to social engineering.
Developments in tax policy in Britain since 1978 The integration of tax and benefits Inevitable since PAYE and the welfare state made most households both taxpayers and benefit recipients.
Non developments in tax policy since 1978 No back to Beveridge or negative income tax A benefit system based on a combination of contingent and means related information is the only cost effective way of providing social assistance
Non developments in tax policy since 1978 No wealth taxes The debate is over