Integrating Income Tax and National Insurance: an interim report
Income Tax and National Insurance are now sufficiently similar that merging them appears to be a plausible option, yet still sufficiently different that integration raises significant difficulties. This paper surveys the potential benefits of integration - increased transparency and reduced administrative and compliance costs - and the potential obstacles, assessing the extent to which each of the differences between Income Tax and NICs - in particular the contributory principle, the levying of an employer charge and the differences in tax base - constitute serious barriers to integration. The paper concludes that few of the difficulties look individually prohibitive, but that trying too hard to avoid significant reform of the current policy framework could produce a merged tax so complicated as to nullify much or all of the benefits of integration.
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References listed on IDEAS
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- Andrew Dilnot & Steven Webb, 1988. "Reforming National Insurance contributions," Fiscal Studies, Institute for Fiscal Studies, vol. 9(4), pages 1-24, August.
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- David Skinner & Mark Robson, 1992. "National Insurance contributions: anomalies and reforms," Fiscal Studies, Institute for Fiscal Studies, vol. 13(3), pages 112-125, August. Full references (including those not matched with items on IDEAS)
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