Alistair Darling is reported to be taking his summer break on the tiny island of Great Bernera in the Outer Hebrides, which is about as far away as one can get from the Treasury without leaving the country. You can understand the Chancellor’s desire to get away from it all, after a year of tax policy U-turns and ‘clarifications’ capped by speculation that he will be forced to abandon at least one of Gordon Brown’s cherished fiscal rules. The continued focus on tax policy and fiscal management has kept the IFS very much in the public eye since the Budget and promises a hectic run-up to what is likely to be a very controversial Pre-Budget Report in the autumn.

In addition to helping guide the media, parliamentarians and the general public through the twists and turns of the policy debate, we have also been contributing long-term thinking on tax design in particular. Last week we published a set of reform proposals for VAT and other indirect taxes, prepared for the Mirrlees Review of the UK tax system. It points out that moving to a uniform rate of VAT would cut compliance and administration costs, interfere less with people’s spending decisions and raise billions in revenue that could be spent cutting other taxes (even after compensating poorer households for the removal of existing reduced and zero rates) The full set of Mirrlees background studies is now available on our website. Work is now underway on the final report which will be published early next year.

Robert Chote
Director

English Longitudinal Study of Ageing (ELSA)

The third wave of the English Longitudinal Study of Ageing was launched on 16 July. The study follows the lives of a representative sample of people aged over 50, interviewing them in detail every two years to gather data about their health, wealth, relationships and social lives. Authors from IFS have collaborated with experts in public health and epidemiology, psychiatry and social research. The report looking at the most recent data highlights issues including the trend for older people to keep on working until later and links between wealth, health and mortality.

Mirrlees Review: reforming the tax system for the 21st century

Much of the work on the Mirrlees Review is nearing completion. Contributed articles covering different aspects of the tax system will be gathered together in a volume to be published by Oxford University Press; pre-press versions will be made available online. Those available so far include: means testing and tax rates on earnings; labour supply and taxes; the base for direct taxation; taxation of wealth and wealth transfers; taxing corporate income; international capital taxation; taxing small businesses; the effects on consumption and saving of taxing asset returns; administration and compliance; the political economy of tax policy; and environmental taxes. An overview volume will present a picture of coherent tax reform. Both will be published in February 2009.

Volume 29, Number 2, June 2008