Think tank: Resolution Foundation
Author(s): Molly Broome; Adam Corlett,; Greg Thwaites
June 28, 2023
This report from UK think tank the Resolution Foundation looks at how to match higher taxes with better taxes.
The UK’s tax take is rising, and is likely to stay high, but the system is not improving. The UK needs a tax strategy to support its economic strategy, using the tax system to boost shared growth. This paper, part of the Economy 2030 Inquiry, describes what a good tax strategy would look like and how to get there. This paper finds that the tax system has got worse because politicians have not been consistent or honest in recognising that taxes are going up, creating an inefficient and unpredictable system. To improve matters, a good tax system would boost efficiency by taxing externalities and land first, and then maximise and share the proceeds of growth by taxing income and consumption fairly and consistently, whilst maintaining predictability and public support over the long term. The paper shows that a better system is possible by outlining a revenue-neutral package worth around 1 per cent of GDP comprising reforms to business, environmental, income and wealth taxes.