Tapering over the tax: Reforming taxation of income in the UK

Article

This policy paper sets out a mechanism for improving the progressivity, efficiency and revenue raising potential of income taxes in the UK. It proposes a major reform of the current system, with two elements.

First, income tax and employee national insurance contributions would be combined into a single tax ‘schedule’, with all sources of income taxed at the same rate, and on the same basis. Second, the existing system of marginal tax bands would be replaced by a ‘formula-based’ system such that every taxpayer’s marginal rate would depend on their own precise level of income. The paper argues that such a system would be more efficient and progressive, and in addition could be used to raise revenues in a way that is fairer and more politically acceptable than the current system.

Related items

  1. A flood warning sign, on a closed country road next to water logged fields in the Avon Valley, Hampshire, England

    Adapt or die: Why progressives need to deal with extreme weather

    The impacts of extreme weather are already directly affecting people and communities across the UK. We lack ways to deal with this. 
  2. The outside of the BBC building in London with people walking in front of it

    Levelling the playing field: The BBC, Big Tech, and the case for a bold charter

    The upcoming charter renewal is the moment to give the BBC the resources, freedom and mission it needs to engage with technology firms on its own terms.
  3. A lighthouse shines a light into a dark seascape at the edge of a cliff on the coast of Wales

    Britain's strategy for a decade of danger: Our nation, our continent, our world

    Britain's foreign policy needs a grand strategy that clearly defines the country’s strategy for security, growth and migration.