In attempting to raise a given amount of tax revenues, the government can choose which tax base to target. In the UK, some revenue is raised from taxing the return to savings and investments, and from taxes on property (e.g. council tax) and the sale and transfer of assets (stamp duties and inheritance tax). The UK does not, unlike some other countries, levy an annual wealth tax. We examine the economic rationale for taxing different forms of activity and explore (theoretically and empirically) what effect the tax treatment of savings, pensions and wealth has on how much individuals save, what form they choose to hold their assets in, and when and how they sell or transfer assets.
Contact IFS on 020 7291 4800 or firstname.lastname@example.org