A strategy for the UK tax system

<p><p><p><p>With the tax system taking almost £4 for every £10 earned in the economy, getting tax design wrong can be hugely costly. Yet the level and quality of debate on tax policy is inadequate; there has rarely been any clear sense of direction from governments; and expensive and damaging mistakes have been all too common.</p><p>In many areas of public policy, governments have habitually set out long-term strategies for change - in education and transport, for example. But no recent government has set out a tax strategy. The consequences of lacking a coherent vision for the tax system have repeatedly been illustrated, not least in the previous Labour government's experience of a succession of ill-thought-through reforms that were introduced and later abolished - including CGT taper relief, the 0% rate of corporation tax and the 10% starting rate of income tax - at great political as well as economic cost. And there have been equally indefensible - albeit more politically successful - sins of omission, such as the spineless failure of successive governments to update council tax valuations in England and Scotland that are still based on 1991 property values.</p><p>With this in mind, the IFS launched a fundamental review of tax policy under the chairmanship of Nobel laureate Sir James Mirrlees, to identify what makes a good tax system for an open and developed economy in the 21st century and to suggest how the UK tax system could be reformed to move in that direction.</p></p></p></p>