chapter  21
30 Pages

Taxation in Great Britain*

WithJoseph A. Pechman

The individual income tax in the United Kingdom starts at a lower income level and has higher initial starting rates than in most other countries. A major element in the public debate on taxation in the United Kingdom was the rise in real individual income tax burdens as inflation pushed people into higher tax brackets. It is extremely difficult to evaluate the effects of tax policy on the economic behaviour of individuals and business in any country. Many other policies besides tax policy have had a significant influence on Britain’s economic performance. In addition to pensions, business managers and directors have a number of highly visible, special perquisites, which receive considerable attention in Great Britain. Much effort has been devoted in Great Britain to the measurement of the inequality in the distribution of income and wealth and to the identification of the determinants of these distributions.