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Home Publications Who pays taxes? A short introduction to tax incidence

Who pays taxes? A short introduction to tax incidence

Journal article | Economic Review

Who pays taxes? This may sound like a simple question, but many politicians don't seem to know the answer. Nor do a great many journalists. In fact, if there's one important economic concept which almost no-one in the general public seems to understand, it's 'tax-incidence' - the economic study of who really pays taxes.

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Newspaper article
External publication
Aligning tax rates between employees and the self-employed would reduce inequity while encouraging entrepreneurial risk-taking, says Stuart Adam, senior research economist at the Institute for Fiscal Studies.
The parts of the UK tax system that dictate how different forms of income are taxed are of central importance and are not fit for purpose.
IFS Working Paper W19/31
The UK taxes business income at much lower rates than employment income. In this paper we describe the problems caused by that differentiation and assess the main arguments used to defend it. We summarise the Mirrlees Review’s proposals for radical reform that would align tax rates across legal ...