The Institute of Economic Affairs (IEA) has published a briefing calling for taxes including CGT, stamp duty, council tax, business rates and IHT to be abolished, offering a number of alternatives in their place. These include:
if CGT is not abolished, indexation allowance should be re-introduced, as CGT raises relatively little revenue and is highly distortive as a tax on transactions;
if IHT is not abolished, the government should move to a system that taxes large gifts at a rate closer to 20% over a large lifetime tax-free limit of around £500,000; and
stamp duty, council tax and business rates should be replaced with property taxes that are much less economically harmful, such as an annual property-based tax set at a fixed percentage of a property’s value, with a cap of 1%, phased in over five or ten years;
Professor Philip Booth, academic fellow at the Institute of Economic Affairs, commented that: ‘changes to these three groups of taxes would considerably simplify the tax system and make taxes more economically efficient’. The proposals would, Professor Booth added, ‘represent a radical reform of, and a huge improvement to the UK tax system’.
The Institute of Economic Affairs (IEA) has published a briefing calling for taxes including CGT, stamp duty, council tax, business rates and IHT to be abolished, offering a number of alternatives in their place. These include:
if CGT is not abolished, indexation allowance should be re-introduced, as CGT raises relatively little revenue and is highly distortive as a tax on transactions;
if IHT is not abolished, the government should move to a system that taxes large gifts at a rate closer to 20% over a large lifetime tax-free limit of around £500,000; and
stamp duty, council tax and business rates should be replaced with property taxes that are much less economically harmful, such as an annual property-based tax set at a fixed percentage of a property’s value, with a cap of 1%, phased in over five or ten years;
Professor Philip Booth, academic fellow at the Institute of Economic Affairs, commented that: ‘changes to these three groups of taxes would considerably simplify the tax system and make taxes more economically efficient’. The proposals would, Professor Booth added, ‘represent a radical reform of, and a huge improvement to the UK tax system’.
