National Insurance contributions

IFS immediate reaction to the Prime Minister's announcement about social care.

It has been widely reported that the government will announce an increase in National Insurance contributions (NICs) to pay for increased funding for health and social care. This observation examines the effects of increasing NICs compared to increasing income tax.

Presented "The Impact of Payroll Tax Subsidies: Theory and Evidence" at the Federal Reserve Bank of Dallas.

The ‘gig economy’ has grown and risen up the policy agenda in recent years. The associated growth in people working through their own businesses and in work happening through platforms highlights difficult questions about when to have boundaries in the tax system and where to put them.

Taxes are often the subject of debate; that is as it should be. But those debates need to be well-informed to produce sensible policy outcomes.

It’s easy enough to see the politics behind Rishi Sunak’s tax increase of choice. Opaque, in the future, jam today, well-hidden pain tomorrow. The scale of the increase, though, makes the economics more concerning. Not only is he unlikely to get as much revenue as he’s banking on, he risks reducing investment levels and hence wages and living standards over the long run.

The tax system discourages employment, investment and risk-taking. It needs reform, say Stuart Adam and Helen Miller.

Presentation of "Tax Evasion and the Minimum Wage" at the OECD Economics Department.

Remember, every time someone calls for more money for the NHS, or social care, or universal credit, as it seems just about everyone is nowadays, they are also implicitly calling for higher taxes in the long run. That’s a less exciting thing to call for. And these issues of tax design may be particularly unexciting. But bigger spending without better taxes will cost us much dearer than it should.

At this event we discussed findings from a new report, funded by the Nuffield Foundation, which sets out the problems with the current tax treatment of business owners’ incomes and investment and discusses how the government could take practical steps towards fixing them.

Choices over benefits policy are never easy. There are unavoidable trade-offs between cost, generosity and incentives. This year offers an opportunity to improve what we’ve got and to make a conscious choice over how generous we want the system to be.

In this webinar, IFS researchers discussed the options the government faces as it considers unwinding, adjusting, or making permanent the temporary Covid-19 benefit increases; and the opportunities this moment presents to address issues with the system that existed prior to the onset of the crisis.

At this online debate, an expert panel reflected on what the future holds for capital gains tax. Could CGT be a post-covid cash cow for the Treasury or would higher rates and smaller reliefs lead to lower investment and less revenue?

At this joint IFS/CIOT online debate, a panel of David Gauke, Chris Leslie, Stuart Adam and Jane McCormick looked back at the changes in taxation over the 2010s.

"There aren’t many upsides to the current situation", write Stuart Adam and Helen Miller. "Using it as an opportunity to fix some bits of our tax system could be a silver lining."

This presentation was delivered as part of the IFS press briefing following the Spring Budget 2020.

The three main political parties offer voters starkly different choices on tax, writes Stuart Adam of the IFS.