Summary
A leading think tank, the Institute for Fiscal Studies (IFS), has advised UK Chancellor Rachel Reeves to avoid quick and ineffective tax solutions in the upcoming Budget. The IFS suggests that while the government needs to increase tax revenues, some tax hikes could harm the economy, and it recommends reforms to make the tax system fairer and more supportive of growth.
Key Facts
- Chancellor Rachel Reeves is expected to raise taxes in the next Budget to meet financial rules.
- The Institute for Fiscal Studies (IFS) warns against quick and ineffective tax changes, calling them potentially harmful.
- The IFS suggests that reforming property and capital gains taxes would be a good start.
- The UK government aims not to borrow for day-to-day spending and to reduce debt as a share of national income before the next election.
- Labour had previously promised not to increase income tax, National Insurance, or VAT for working people.
- The IFS advises against a wealth tax, citing practical challenges and potential negative effects on savings.
- Reforming council tax to reflect current property values is recommended by the IFS.
- The Treasury indicates the Budget will focus on balancing public service funding with encouraging growth.
