Monday, November 15, 2010

On the UK Mirrlees Review

The UK government has published its "Mirrlees Review" from the Institute of Fiscal Studies, which, as The Economist put it, is of relevance to governments around the world; it
"argue[s] that most governments could find a way to raise the amount of money they need from the tax system while imposing much lower costs than they currently do."
TJN hasn't parsed the report, although some tax experts we know have. One expert to emailed us, in a private email, said this:

I had no hope at all for the Mirrlees report once I saw the list of contributors. Here we have the world's greatest saving glut in years and people are seriously talking about how to increase savings and about all of the unfairness of taxing the income from savings. Why? Not for economic reasons --- you don't tax what is in short supply (consumption) and exempt what is plentiful (savings) for efficiency reasons.

The prior huge saving glut was around 1980, when the oil-rich states were earning more than they could spend --- the Saudi ports, such as Jubail, were backed up for many years, and the Saudi's were converting sea water into fresh water at great expense to grow wheat. And what were the economists telling us --- we had a savings shortange, to be fixed by trashing the income tax and moving to a consumption tax."

And Richard Murphy, a TJN Senior Adviser, has written a series of blogs:

The assumption of neutrality in Mirrlees

Increasing tax on the elderly – the Mirrlees way

The Mirrlees quote of the day

Mirrlees – a redeeming feature

Mirrlees and savings – making inherently unjust proposals

Mirrlees – and consumption taxes

Mirrlees thinks that inequality mainly results from different opportunities to work

Mirrlees – the fundamental flaw

What sort of tax system do we want?

Evidence of bias at the Institute for Fiscal Studies

Mirrlees – one mad or bad idea kicked into touch


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