Here’s what you need to know
Economists at the Institute for Fiscal Studies (IFS) have warned Theresa May and Jeremy Corbyn against a new “tax lock.”
The Conservative government back in 2015 vowed not to raise income tax, national insurance contribution or VAT.
However, May has stopped short of keeping the promise pledged ahead of 8 June general election muting that only VAT could be capped.
The IFS have warned politicians against committing to key taxes ahead of Labour and Conservative party publishing their manifestos within the next fortnight.
Economist Paul Johnson wrote on Twitter:
— Paul Johnson (@PJTheEconomist) May 1, 2017
Helen Miller, associate director at the IFS said: “Regardless of whether a party wants to raise or cut taxes overall, the tax lock is bad policy and should not be repeated in any of the upcoming manifestos.”
“Constraining the workhorse taxes in this way prevents desirable tax reforms, as we have seen in relation to the taxation of the self-employed, and restricts the policy levers available to deal with any unexpected change in the economy.”
The IFS said on Twitter: “Regardless of whether one wants to cut taxes overall, ‘tax lock’ is a bad policy & shouldn’t be repeated #GE2017”
— IFS (@TheIFS) May 1, 2017