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.
One of the main reasons I took up the study of economic problems was indignation at the absurdity of unsatisfied wants side by side with idle hands willing to work which I believed existed before the Second World War.
The term “monetarism” has been much used in the last three or four years – sometimes as a clarion call for action to improve economic policy, but often an epithet of abuse.
I seek common ground today in pursuit of a common objective: a substantial and lasting improvement in the bleak prospects for employment. Members of all parties demand an improvement. But rhetoric and sympathy will not help to create jobs or generate growth.
Britain is an overtaxed country – true or false? Published statistics give a conflicting message. In 1972 total UK taxation, including social security contributions as a proportion of gross national product, came in about halfway down a list of OECD countries. Yet, as Dr Bracewell-Milnes shows in this timely paper, even in that year the UK tax burden on high earners was high, and on savers intolerably high.
It is now widely realised that many of our present economic ills stem from a cardinal error, the belief that inflation and unemployment presented a choice of evils. We have learned to our cost that inflationary measures designed in good faith to abate unemployment have eventually intensified it, leaving us with the worst of both worlds.