UK Policy Briefing
Pre-Budget briefing on 'Taxation and Gender' from the UK Women's Budget Group – Spring 2023
‘As women are more likely to rely on and work in public services, they tend to benefit particularly from the public spending that tax can be used to finance.’
As income and wealth disparities rise, our public services are failing to meet the pressures on them in the face of the cost-of-living crisis. This situation makes a wholesale reform of the tax system all the more urgent in order to make it more progressive and fair so that those who have gained most from current crises contribute to relieving the hardship of others.
This requires ensuring that high levels of wealth are taxed and all forms of income and capital gains are taxed in the same progressive way. The Wealth Tax Commission found that a one-off, or periodic, 5% tax on net wealth over £2m could raise £81bn. What’s more, taxing wealth directly would contribute to reducing gender inequalities in wealth holdings as men dominate among those owning high levels of wealth.
As energy companies are profiteering from the same high prices that are causing hardship to millions of families, the windfall tax on energy companies should be increased and its loopholes removed. The extra revenue should be used to help invest in green energy and support families struggling to pay their energy bills. Additionally, new ways of using tax to prevent environmental damage that do not increase inequalities should be explored.
‘A significant change in attitude towards tax payment in the rhetoric and actions of UK politicians is needed within and outside parliament, resisting the temptation to portray tax as inherently undesirable.’
Council tax reform is urgently needed to reflect current property values more accurately and progressively. Alongside a wholesale reform, central government funding should be increased as councils are unable to fund adequate provision of public services through council tax alone, especially in more deprived areas where people need them most.
While raising the corporation tax to 25% is a welcome move, it is not enough. Returning the rate to 26%, the level it was at in 2011/12, would raise around £19bn alone. In addition, tax avoidance, both through tax havens and in the UK, should be tackled more effectively, through the abolition of tax reliefs and allowances and funding HMRC properly to employ more and better qualified staff.
WBG and Gingerbread are calling on the Government to follow through with the promise to uprate benefits in line with inflation.
Briefing from the UK Women’s Budget Group on the impact of changes in taxation policy on women.
An event discussing a gendered analysis of the Spring Budget 2024.
A blog by Susan Himmelweit, emeritus professor of economics at the Open University and Chair of WBG's Policy Advisory Group