Britain’s tax system isn’t fit for purpose. As this paper shows, the historical evolution of our tax system has produced one marked by a great deal of complexity, but which struggles to raise the revenue required to meet the public’s demands on the state.At the same time, almost two decades of weak economic growth and an ageing population have left British taxpayers in an invidious position: where the critique of the public was once that they wanted a European-style welfare state on American levels of taxation, they are now facing something more like an American-style welfare state on European levels of taxation. Fiscal pressure will only continue to grow as our population ages, immigration falls, and governments grapple with the demands of our growing defence needs and the climate transition. Many sensible proposals for tax reform have been put forward over several decades. But few really big reforms have come to pass. This paper attributes that inertia to three pathologies.A public pathology, whereby the British public shies away from the tax implications posed by their expectations of public services.The political pathology, whereby in response to the public pathology, politicians have continually sought easy fixes – like freezing thresholds or stealth taxes – rather than confront the public with honest fiscal truth.The press pathology, which amplifies the losers of any tax rise, and distorts political debate and public perceptions.

Taxing times: Policies, politics, and principles
Abi Hynes
