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An economic analysis of pension tax proposals

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  • Armstrong, Angus
  • Davis, Philip
  • Ebell, Monique

Abstract

The Government has recently issued a consultation document which raises the possibility of a substantial change in the taxation of pensions. In this paper we assess the economic consequences of changing from the existing EET system (where pension savings and returns are exempt from income tax, but pension income is taxed) to a TEE system (pension savings would be from taxed income but with no further taxation thereafter), making use of two complementary approaches. First, we review the economic and empirical literature, and second we construct a general equilibrium overlapping generations (OLG) model parameterised to UK data and the UK tax system.

Suggested Citation

  • Armstrong, Angus & Davis, Philip & Ebell, Monique, 2015. "An economic analysis of pension tax proposals," LSE Research Online Documents on Economics 86276, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:86276
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    References listed on IDEAS

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    1. Chen, Damiaan H. J. & Beetsma, Roel M. W. J. & Ponds, Eduard H. M. & Romp, Ward E., 2016. "Intergenerational risk-sharing through funded pensions and public debt," Journal of Pension Economics and Finance, Cambridge University Press, vol. 15(2), pages 127-159, April.
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    Cited by:

    1. Doorley, Karina & Callan, Tim & Regan, Mark & Walsh, John R., 2018. "The tax treatment of pension contributions in Ireland," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI).

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    Keywords

    Over-the-Counter Market; Trading Network; Matching; Intermediation;
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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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