Call for simplification of tax system in drive for economic efficiency
A whole range of taxes need to be abolished to boost efficiency and make the revenue collection system more simple, the Institute of Economic Affairs (IEA) has said.
The body wants the Government to do away with c apital gains tax, stamp duty, council tax, business rates and inheritance tax.
The IEA said capital gains tax should be ended because when it is applied to investments in company shares it is generally a double levy that taxes anticipated profits and retained profits that are also taxed elsewhere in the system.
If the Government lacks the will to do away with inheritance tax, then the system should be reformed so people who are left money, or given large gifts, should be taxed on the income they receive in a similar way to wages, the organisation said.
The IEA brands council tax "regressive", and says stamp duty acts as a block to labour mobility.
It has called on ministers to replace the two levies with an annual property-based tax set at a fixed percentage of a property's value, with a cap of 1%.
Professor Philip Booth, academic fellow at the IEA said: "Changes to these three groups of taxes would considerably simplify the tax system and make taxes more economically efficient.
"The changes would be largely revenue neutral.
"The proposals would represent a radical reform of, and a huge improvement to, the UK tax system."