Taxes on wealth and spending

This research explored the prevalence of gifting in the general population and how it varied between different groups, based on a new quantitative survey was conducted with a representative sample of adults in Great Britain. The survey also explored the nature of gifting – including the number and value of gifts given, who they were given to, and the motivations for doing so – as well as awareness of inheritance tax rules and exemptions.

Alcohol consumption is associated with costs to society from anti-social behaviour, crime and public costs of policing and health care. These externalities are non-linear in alcohol consumption, with a small number of heavy drinkers creating the majority of the costs. Governments attempt to reduce problematic alcohol consumption through restricting availability and with policies that aim to increase prices. In this paper we study the design of alcohol taxes.

This paper examines the behavioural response of households to wealth transfer taxation using household survey data from Japan, with particular attention being paid to the implications of different bequest motives that households may have.

The extent to which people draw on their housing wealth in later life is an important issue, with implications for the living standards of current older individuals and their use of other financial resources, the likely bequests that will be received by younger generations, and policymakers’ assessment of the financial preparedness for later life of current younger individuals. Housing mobility at older age also has implications for the turnover and appropriateness of the housing stock.

In this briefing note, we examine how individuals’ financial wealth evolves as they age through retirement.

There has been lots of recent research and debate on individuals’ accumulation of wealth for retirement, driven by the concern that younger generations are not saving enough. Much less attention, however, has been paid to how individuals use their wealth once in retirement. In this note, we summarise the findings of recent and new IFS research addressing this omission and considering the use of different components of wealth in retirement.

The ageing of the population is one of the biggest changes facing society today. People are living longer, remaining healthier at older ages, and working and engaging in society for longer. This is an achievement that should be celebrated, both in its own right and for the opportunities it presents, with older generations able to provide assistance to younger generations and pass down their accumulated experience and wisdom. However, such changes are, of course, not without challenges.

We study optimal corrective taxation in the alcohol market. Consumption generates negative externalities that are non-linear in the total amount of alcohol consumed. If tastes for products are heterogeneous and correlated with marginal externalities, then varying tax rates on different products can lead to welfare gains.

Corrective taxes have been implemented in a number of countries with the aim of addressing growing concern about the rise in obesity- and diet-related diseases. The rationale is that food consumption imposes costs on the consumer in the future that they do not fully take into account at the point of consumption (‘internalities’). Corrective taxes have the potential to improve welfare by reducing suboptimally high consumption. We review the literature on the size of these internalities and on the optimal corrective tax, which depends on the patterns of internalities, the price responsiveness of consumers, and on redistributive aims.

Paper forthcoming in Quantitative Economics.