Tax Simplification: Breakfast Briefing
30 April 2008
The taxation environment in which we operate plays a fundamental part in affecting the take home pay of employees.
Whilst at an employment level it is difficult to impact the tax regime directly, nevertheless an understanding of its principles and potential future trends is important in helping to determine remuneration planning.
The Breakfast Briefing:
The Adam Smith Institute is a long-established, wide-ranging, non-party, free market think tank which has been influential in shaping government policy. Dr Madsen Pirie was one of the founders and will remind us of Adam Smith's principles:
- tax should be proportionate to the income "derived under the State's protection"
- taxes should be certain and not arbitrary
- taxes should come at a convenient time
- taxes should not be excessively costly to collect and administer.
Madsen argues that we have moved away from Adam Smith's principles with negative consequences. Moreover, the increasing complexity of our tax system is counter-productive in terms of the costliness of collection, the opportunity for misinterpretation and the fact that it is just hard to understand.
Whilst his views have significance at a national level, the principles that guide them should also be taken into account when planning compensation and benefits strategies.
The Breakfast Briefing was based on a paper produced by Madsen, followed by questions and discussions on all aspects of economic and fiscal policy.