Tax and recovery: Beyond the binary
Article
Even before the pandemic struck, the UK tax system was in serious need of reform. It is inefficient, unfairly taxes labour more than capital, exacerbates inequality, and fails to shape the economy in a sustainable way.
The briefing shows that alongside a major stimulus, reforming and raising certain taxes now could ensure the recovery is more balanced, more sustainable and prevents inequality from escalating further. Indeed, such a package would have a large positive effect on the recovery. This does not preclude a discussion of further tax reform in the future. But some initial changes should start now to lay the foundation for a more prosperous and just post-pandemic recovery.
We propose four priority reforms that could take place even before the recovery has been achieved: raising capital gains and dividend tax, raising corporation tax, reforming wealth taxes and a land value tax. These could make the system significantly more balanced, raise up to £55 billion, and have only a small impact on growth during the recovery.
Related items
Taken to heart: Inequalities in heart disease in Scotland
More than 7.6 million people across the UK live with cardiovascular disease (CVD), around twice as many as live with Alzheimer’s disease and cancer combined.Skills passports: An essential part of a fair transition
This month, government will publish its Clean Energy Workforce Strategy. This plan covers two aims. First, filling the growing demand for skills in clean energy industries is essential to keep on track to reach the government’s clean power…Fixing the leak: How to end the £22 billion annual taxpayer losses at the Bank of England
The Bank of England increased its interest rates over recent years, aimed at reducing inflation. But this has also had an unintended effect on the Bank of England’s massive government bond buying – ‘quantitative easing’ – programme.