Tax by design

Published on 13 September 2011

Tax by Design presents a picture of coherent tax reform whose aim is to identify the characteristics of a good tax system.

Preface

A preface to Tax by Design.

1. Introduction

In this introductory chapter we provide context before we get on to the economic arguments and the analysis of each type of tax.

2. The Economic Approach to Tax Design

This chapter presents a framework for how to judge a tax system and its effects on welfare, distribution, and efficiency.

3. The Taxation of Labour Earnings

In this and the next two chapters, we look in detail at earnings taxation.

4. Reforming the Taxation of Earnings in the UK

This chapter delves into a more practical assessment of the UK system and consider changes to the rates and thresholds of existing taxes and benefits.

5: Integrating Personal Taxes and Benefits

In this chapter we focus on reforms to the architecture of the system: the instruments used to implement taxation of earnings.

6. Taxing Goods and Services

In this chapter we consider the choice of base and structure for indirect taxes.

7. Implementation of VAT

In this chapter we focus on some of the practical issues in its implementation, and in particular in the design and operation of VAT.

8. VAT and Financial Services

In this chapter we give particular consideration to the taxation of financial services.

9. Broadening the VAT Base

In this chapter we look at a particular reform to VAT in the UK.

10. Environmental Taxation

In this chapter we address some of the main economic issues in the design of environmental taxes.

11. Tax and Climate Change

This chapter sets out the most important facets of climate change which should drive policy choices.

12. Taxes on Motoring

This chapter looks at the issues around the design of motoring taxes, and in particular at congestion charging and ‘second-best’ options.

13. The Taxation of Household Savings

This chapter looks at a central aspect of how economists evaluate a tax system, which is the taxation of household savings.

14. Reforming the Taxation of Savings

In this chapter we focus on three classes of assets: simple risk-free assets, riskier assets, and pensions.

15. Taxes on Wealth Transfers

In this chapter we focus specifically on the taxation of wealth transfers.

16. The Taxation of Land and Property

This chapter outlines land value taxation and the taxation of the consumption value of housing, to propose a reform of council tax in the UK.

17. Taxing Corporate Income

This chapter and the following two are concerned with the taxation of income derived from business profits.

18. Corporate Taxation in an International Context

In this chapter we focus on corporate taxation in the context of international companies.

19. Small Business Taxation

This chapter considers how a reformed tax system could provide a more neutral treatment of business activities.

20. Conclusions and Recommendations for Reform

In this, the 20th and final chapter of the book, we bring together the main lessons and conclusions of the whole review.

Tax by Design, the final report from the Mirrlees Review, presents a picture of coherent tax reform whose aim is to identify the characteristics of a good tax system for any open developed economy, to assess the extent to which the UK tax system conforms to these ideals, and to recommend how it might realistically be reformed in that direction. Drawing on the expert evidence in Dimensions of Tax Design, it provides an integrated view of tax reform.

Preface and Contents

1. Introduction

2. The economic approach to tax design

3. The taxation of labour earnings

4. Reforming the taxation of earnings in the UK

5. Integrating personal taxes and benefits

6. Taxing goods and services

7. Implementation of VAT

8. VAT and financial services

9. Broadening the VAT base

10. Environmental taxation

11. Tax and climate change

12. Taxes on motoring

13. The taxation of household savings

14. Reforming the taxation of savings

15. Taxes on wealth transfers

16. The taxation of land and property

17. Taxing corporate income

18. Corporate taxation in an international context

19. Small business taxation

20. Conclusions and recommendations for reform

References

Authors

Stuart Adam

Senior Economist

Stuart is a Senior Economist working in the Tax sector, and focuses on analysing the design of the tax and benefit system.

Tim Besley

Research Associate London School of Economics

Timothy is a Research Associate at the IFS and a Professor of Economics and Political Science at the London School of Economics and Political Science.