ABSTRACT
From the discussion of a universal expenditure tax (UET) in the preceding chapter it has become clear that, in the absence of a system of self-assessment for liabilities to expenditure tax, it would not be practicable to administer a UET unless there were a long band of expenditure liable to a single basic rate of tax, which covered a large proportion of all taxpayers. Even in this case there would be difficulty in avoiding an end-year review of virtually every taxpayer's tax liability, unless special measures were taken to ensure that the savings and dissavings of those taxpayers whose liability to tax remained in the basic rate band were in some way automatically adjusted for remission of tax on their savings and for deduction of tax on their dissavings. On pp. 181-182 of Chapter 9 two possible methods were outlined, 1 namely (i) dealing in assets net of tax, and (ii) giving a tax incentive for small savers to channel their savings through a restricted range of securities specially designed for the purpose of giving automatic basic rate relief to savings and imposing automatic basic rate tax on dissavings.
