2018 WBG Briefing: Tax and Gender

Date Posted: Friday 19th October 2018

October 2018

Ahead of the 2018 Autumn Budget, we’ve put together a briefing on the impact of tax policy on women. View and download the full briefing here.

Key points

  • Tax is the necessary financial contribution that individuals and companies make to a well-functioning society. Women tend to benefit particularly from the public spending that tax can be used to finance.
  • The National Health Service and the social care system are both recognised to need substantial funds invested in them; while an extra £20.5bn a year has been pledged to the NHS by 2023, the promised Green Paper on social care funding has yet to appear. If those with disabilities and the frail elderly, the majority of whom are women, are to have their needs met social care will also require substantially increased funds.
  • At the same time as austerity measures are having particularly harsh effects on women, tax cuts since 2010 disproportionately benefitting men will cost the Treasury £47bn per annum by 2021-22.
  • The Women’s Budget Group calls on the Chancellor not to raise income tax thresholds any further instead the whole income tax system should be reformed to make it more progressive, more inclusive and reduce the use of income tax allowances, which are unfair to those earning below the tax threshold and encourage tax avoidance and a view of income tax as a burden.
  • The fuel tax escalator should be implemented rather than fuel duty frozen once again, as the Chancellor indicated that it would be; not only is fuel tax duty a useful source of revenue, but it is vital that fossil fuel use be reduced to help meet climate change targets.
  • We also call on the Chancellor to cancel further planned reductions in corporation tax; instead of continuing to fuel a race to the bottom, he should set it at average international levels and lead efforts to institute the international coordination of tax rates.
  • Inheritance tax should be reformed and used more forcefully to reduce wealth inequalities and promote social mobility. Progressive taxation of receipts rather than estates should be pursued.
  • Cuts to central government funding of Local Authorities should be reversed as leading to inadequate public services. They are also unfair in that poorer LAs can raise less money from business rates and council tax but have greater demand for public services. Women, being more reliant on those services, stand to lose most from these changes.
  • Tax avoidance, both through tax havens and in the UK, should be tackled more effectively, including through employing more and better qualified staff at HMRC.

Written by Susan Himmelweit, Emeritus Professor of Economics, the Open University