IFS: Reforms Needed Alongside Tax Changes in Budget
Rising taxes without reform could do more damage than good, the Institute for Fiscal Studies has warned.
A report published on October 13 sets out options for tax increases Chancellor Rachel Reeve is facing in the Autumn Budget in November, warning against "half-baked fixes".
if Rachel Reeves limits her ambition to collecting more revenue, she will have fallen short
According to the IFS, increasing taxes on returns to capital without reform, such as on rental income, dividend income, interest income, self-employment profits, or capital gains, would cause unnecessary economic damage.
Isaac Delestre, a senior research economist at IFS, notes that revenue rise is likely to be a major goal of the upcoming Budget, but warns that any package of tax rises will weigh on growth.
However, economic damage could be limited by tackling inefficiency in the tax system.
Author's summary: IFS warns against tax increases without reform.
- Tax increases without reform could cause economic damage
- Reform is necessary to limit economic damage
- IFS warns against "half-baked fixes"