IFS Chief: Cutting Tobacco Taxes Would Raise Revenue
The Spectator held a tax panel at Tory Conference this afternoon at which the Laffer Curve naturally came up. Former Chief Secretary to the Treasury Laura Trott made a hash of her government’s record by claiming that the “higher rate” of CGT was cut at the last budget which raised more revenue. In fact it was only the CGT rate on property which Hunt cut (from 28 to 24) and the revenue effect won’t be known until 2026…
Institute for Fiscal Studies chief Paul Johnson chimed in on whether there were any taxes for which a cut would boost Treasury coffers:
“Tobacco duty: but that’s not necessarily something I would suggest.”
That’s a sound admission from the tax-favourable IFS. As Guido has pointed out the Treasury is losing billions every year thanks to an ever-swelling black market. £4 billion in tax revenue from tobacco – the entire policing budget – was foregone last year alone. As usual evidence isn’t factored in to politicians’ decision-making…
