UK Policy Briefings
Spring Budget 2021: Taxation and gender
Date Posted: Monday 1st March 2021
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.
- Given rising unemployment and falling demand, the costs of the pandemic should not be paid for by immediate tax rises or any further austerity cuts in public services.
- But it is urgent that the tax system be reformed to make it fairer and more progressive so that it is better able to contribute to the funding of public expenditure, including by ensuring that all forms of income and capital gains are taxed in the same progressive way.
- Tax reliefs, allowances and exemptions should be treated like any other expenditure with their gains rigorously assessed against their costs to the Exchequer. These types of reliefs tend to benefit better-off men, and fuel tax avoidance and the tax avoidance industry.
- Inheritance tax should be replaced by the progressive taxation of receipts to reduce wealth inequalities and promote social mobility.
- Fuel taxes should not continue to be frozen; thought should be given to implementing new and existing environmental taxes in ways that do not increase inequalities.
- Alcohol taxes should be increased and put on a more rational basis, primarily to benefit the nation’s health and as a useful source of revenue.
- A better system of local taxation based on local income tax and a land value tax should be considered. In the meantime, central government funding of Local Authorities should be increased and Council Tax reformed so it becomes progressive rather than regressive.
- The UK should take the lead in developing international agreements to prevent tax secrecy (e.g. by requiring country by country reporting), set floors to tax levels to prevent a raise to the bottom in personal and business taxation, remove tax loopholes that allow for tax avoidance and restrict the range of tax allowances, reliefs and exemptions more generally.
Tax avoidance, both through tax havens and in the UK, should be tackled more effectively, including through funding HMRC properly to employ more and better qualified staff.