Abstract
A feature of this year's Budget was the shift in emphasis from direct taxation to
indirect taxation. The annual yield of income tax has been reduced by £4½ billion
while that of direct taxes was increased by a similar amount. It must be acknowledged that the new tax and price index has a number of deficiencies. It is only applicable to a proportion of the population, namely those who pay tax and whose gross income is less than £10,000 per annum. It takes no account of the social wage, nor of changes in benefits, such as the recent restructuring of child allowance. It smoothes out tax payments over a full year even though, for administrative reasons, these may fluctuate widely from month to month. This brief paper explores some of these deficiencies in more detail and assess their impact on taxation.
indirect taxation. The annual yield of income tax has been reduced by £4½ billion
while that of direct taxes was increased by a similar amount. It must be acknowledged that the new tax and price index has a number of deficiencies. It is only applicable to a proportion of the population, namely those who pay tax and whose gross income is less than £10,000 per annum. It takes no account of the social wage, nor of changes in benefits, such as the recent restructuring of child allowance. It smoothes out tax payments over a full year even though, for administrative reasons, these may fluctuate widely from month to month. This brief paper explores some of these deficiencies in more detail and assess their impact on taxation.
| Original language | English |
|---|---|
| Pages (from-to) | 29-30 |
| Number of pages | 2 |
| Journal | Quarterly Economic Commentary |
| Volume | 5 |
| Issue number | 2 |
| Publication status | Published - Oct 1979 |
Keywords
- tax and price index (TPI)
- retail price index (RPI)
- direct taxation
- indirect taxation
- tax liabilities