Tax and cost of living

The Centre for Policy Studies wants Britain to have a tax system that is simple, fair, and pro-growth. And although there have been some encouraging moves on tax policy in recent years – the corporation tax rate has gone down, the personal allowance has gone up, and savers have benefited from more generous ISAs – there is still a lot of work to be done.

We have an income tax system that is riddled with punitive marginal rates and perverse incentives that discourage work and enterprise. We have heavy property taxes that distort markets and contribute to a growing housing crisis. And we tax businesses in a way that does little to promote long-term investment. Above all, we have a tax burden that stands at its highest level in decades, and a tax code that is – at least by some measures – the longest in the world.

If we’re going to rise to the economic challenges of the 21st Century, this has to change. We need tax reform that puts more money in people’s pockets, and promotes robust, sustainable growth. At the Centre for Policy Studies, our aim is to design tax policies that meet these objectives in a practical, popular way – and which are rooted in our core principles of enterprise, opportunity, and ownership.

Our economic agenda is not confined to tax reform, however. Alongside projects looking at housing, welfare, and business policy, the Centre for Policy Studies is working on ideas to lower the cost of living – not through heavy-handed state intervention, but with reforms that make markets more competitive and ensure that consumer interests always come first.

The salience of this issue should not be underestimated. Our “New Generation” polling asked people what government could do to make their own lives better, and across the age spectrum, “do more to keep down the cost of living” was a clear winner. Those aged 18–24 ranked it just behind “more affordable housing”, and those over 65 put it second behind “better health service provision”. But every other age group made lower living costs their number one priority.

Finding realistic ways to make British life more affordable is therefore a central focus of the Centre for Policy Studies’ work.

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177 - 192 of 248 Research articles

The Chancellor’s record: an audit of the last ten years

Ruth Lea - Economy

The December 2006 Pre-Budget Report (PBR) will be the Chancellor’s tenth, and, widely expected to be his last. This is, therefore, an opportune time to take an audit of some key aspects of the Chancellor’s record over the last 10 years.

The case for reducing business taxes

Charlie Elphicke - Economy

Back in the late 1990s when, as Ireland’s Minister of Finance, I started cutting taxes, many people feared that the loss of revenue to the Exchequer would be massive and that the policy would have to be abandoned. But the opposite happened.

A better way to help the low paid: US lessons for the UK tax credits system

Rupert Darwall - Economy

Poverty is not a line, a statistical abstraction across a graph. Ultimately, it is not a lack of money. It is the inability to earn money and dependence on welfare.

Where has your pay rise gone? Disposable income stagnates while personal debt soars

Charlie Elphicke - Economy

According to the ONS, real earnings (average earnings index, adjusted for RPIX) grew by just 1% a year between 2001 and 2005.

Robin Hood or Sheriff of Nottingham? Winners and losers from tax and benefit reform over the last 10 years

Charlie Elphicke - Economy

This paper compares the share of taxes (direct and indirect) paid by household income groups in 2004-05 with the share of taxes paid in 1996-97. It also compares the share of benefits received by each household income group over the same period. All data are from the Office of National Statistics (ONS).

Tax Simplification: How, and why, it must be done

David Martin - Economy

Tolley’s Tax Handbooks 2004-2005 are the standard manuals on current tax law for tax practitioners. They are about 11,000 pages long.

Public Sector Borrowing: keep a grip

Ruth Lea - Economy

In a speech to the CBI in Manchester (of 20 January 2005), the Governor of the Bank of England urged the Chancellor to maintain a firm grip on government borrowing.

Creating wealth and eliminating poverty

David Cameron MP - Economy

Creating wealth and eliminating poverty

Declining Government Productivity: another tax on the economy

Richard Jeffrey - Economy

The level of government spending, the public sector’s role in the economy and the government’s productivity record are worrying.

Public Spending Trends: winners and losers

Ruth Lea - Economy

Total public sector spending has increased substantially since 1997/98 and, especially, since 1999/2000. This is well documented. But what is less well-documented is just how disparate the experience of the departmental “winners and losers” has been (and will continue to be if the current Government’s plans are implemented). This short Perspective seeks to redress the balance.

Time to seize the moment: “À la carte Europe” is the future for the EU

Ruth Lea - Economy

The failure of, and acrimony at, last week’s summit has only added to the feeling that the EU is in a state of crisis.

An overview of the flat tax

David Martin - Economy

There has been much welcome discussion in recent months concerning a flat tax.

Take poor families out of tax!

Lord Blackwell - Economy

Amongst advocates of a lower (and simpler) tax economy, there is increasing support for the notion that one of the most effective and socially desirable targets for tax reduction would be to raise the thresholds at which poor families start paying income tax.

Tax and spend: no way to run an economy

Ruth Lea - Economy

There is no doubt that the current Government has increased the size of the public sector significantly.

Pollyanna, not prudence the Chancellor’s finances

Ruth Lea - Economy

On 2 December 2004, the Chancellor of the Exchequer is due to present his next Pre-Budget Report – his eighth. Political commentators will, doubtless, be listening for any hints concerning any election giveaways that may be announced in next year’s Budget – probably the last before the next election.

Reforming the Private Finance Initiative

Alistair Craig - Economy

Philippa Roe was in at the beginning of PFI at the Treasury, and now works in the City of London in the financing of PFI deals. She is particularly well placed to have produced this excellent survey of the development of PFI over the last 12 years and of the problems and issues that need to be addressed, with recommendations for their solution.

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177 - 192 of 248 Research articles