Facts and figures about UK taxes, benefits and public spending.
Income distribution, poverty and inequality.
Analysing government fiscal forecasts and tax and spending.
Analysis of the fiscal choices an independent Scotland would face.
Case studies that give a flavour of the areas where IFS research has an impact on society.
Reforming the tax system for the 21st century.
A peer-reviewed quarterly journal publishing articles by academics and practitioners.
Type: Journal Articles
Authors: Michael Keen, Alexander Klemm and Victoria Perry
ISSN: Print 0143-5671 Online: 1475-5890
Published in: Fiscal Studies, Vol. 31, No. 1, March 2010
Volume, issue, pages: Vol. 31, No. 1, pp. 43 - 79
JEL classification: H20, H21, H87, F55
Did taxation play any role in precipitating the financial crisis? Are there lessons to be drawn for future tax reform priorities? This paper reviews the main channels by which tax effects might have been felt and which may require forceful attention. These include in particular the large tax biases favouring debt finance and, in some countries, investment in housing. The complexities of national tax codes, and the international interaction between them, have, moreover, encouraged the use of complicated financial instruments and international tax planning, reducing transparency. Tax distortions did not cause the crisis - in the sense that there are no obvious tax changes likely to have triggered it - but they may well have contributed by leading to higher leverage and more complexity than would otherwise have been the case. Most of these distortions have long been a source of concern, but dealing with them may be more important than previously supposed.