Was Nigel Lawson right?

Article Abstract:

The 1988 UK Budget contained sweeping tax cuts for individuals: the top rate of income tax was slashed from 60% to 40%, and the basic rate was cut from 27% to 25%. Then Chancellor of the Exchequer Nigel Lawson contended that sweeping reductions in the top tax rate for individuals would result in more tax revenue being raised because top earners would be encouraged to work longer hours now that remuneration would not be so onerously taxed. A survey of accountants was conducted to ascertain whether Lawson's contentions that lower taxes would lead to longer work hours and higher wages was true. Research results indicate that the effects of the tax cut were negligible. While most respondents did report an increase in hours worked and higher wages, the increases typically were the result of more business due to an expanding economy and not in response to the tax cut.

Accounting, auditing, & bookkeeping, Tax accounting, Economic policy, Tax reform, Income tax, Great Britain, Lawson, Nigel

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Capital's contribution to revenue

Article Abstract:

Capital taxation raises less money today for many of the 23 member nations of the Organization for Economic Cooperation and Development. The combined yield of personal capital taxes and capital transfer taxes such as death and gift duties fell from an average of 1.61 percent of total tax revenue in 1965 to 0.66 in 1985. The decline is attributed to growth in public expenditures and taxes as a segment of national output, and also to increases in other taxes such as social security and income taxes. Great Britain has led the field in revenue decline, but government policy is to continue tax reductions as a way of promoting business.

Membership, Taxation, Organization for Economic Cooperation and Development, Revenue

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