TaxAdministrationThink tank says taxing rich is ‘counter-productive’

Think tank says taxing rich is ‘counter-productive’

The Institute of Fiscal Studies says increasing tax for the rich is unlikely to raise extra revenue

The Institute for Fiscal
Studies
says fresh ‘albeit tentative’ evidence has revealed ratcheting up
income tax rates for those earning more than £100,000 is likely to be
counter-productive.

The latest IFS study calls for a radical makeover of Britain’s tax credit and
benefit system, noting tax cuts are needed for low income earners, who face weak
work incentives, the Financial Times reports.

Mike Brewer of the IFS told the FT that raising tax rates for the
highest income earners was likely to lead to less returns as the higher taxes
stopped them from working as hard and encouraged them to go abroad or to engage
in more aggressive tax planning.

The research was commissioned by the Mirrlees Review of the British tax
system, chaired by Nobel Prize-winner Professor Sir James Mirrlees for the IFS,
but its conclusions may not necessarily be adopted in the final report.

Further reading:

Darling’s Budget leaves only £2.8bn leeway

Think tank warns govt risks breaking debt rule

Read
story in the Financial Times

Related Articles

Are you ready for the Trusts Registration Service?

Administration Are you ready for the Trusts Registration Service?

4d Helen Thornley, ATT Technical Officer
Advisers bullish despite Brexit concerns

Accounting Standards Advisers bullish despite Brexit concerns

1y Fraser Simpson, Reporter
Brexit: Five questions accountants should be asking

Accounting Firms Brexit: Five questions accountants should be asking

1y Fraser Simpson, Reporter
HRMC loses £653,000 tax battle following administration error

Administration HRMC loses £653,000 tax battle following administration error

1y Fraser Simpson, Reporter
European inquiry into Panama Papers receives go-ahead

Administration European inquiry into Panama Papers receives go-ahead

1y Fraser Simpson, Reporter
UK votes to leave EU – accountancy profession reacts

Accounting Firms UK votes to leave EU – accountancy profession reacts

1y Fraser Simpson, Reporter
European Commission close to anti-tax avoidance package

Administration European Commission close to anti-tax avoidance package

1y Fraser Simpson, Reporter
‘Significant recovery’ for HMRC customer service, claims boss Thompson

Administration ‘Significant recovery’ for HMRC customer service, claims boss Thompson

1y Fraser Simpson, Reporter