Skip to main content Accessibility help
×
Hostname: page-component-7c8c6479df-xxrs7 Total loading time: 0 Render date: 2024-03-19T09:04:16.512Z Has data issue: false hasContentIssue false

CHAPTER 3 - Model Treatment of UK Taxes, Subsidies and Government Expenditure

Published online by Cambridge University Press:  04 August 2010

Get access

Summary

As indicated in Chapter 2 all major taxes and subsidies operating in the UK (post April 1973) enter our model. This chapter discusses the treatment of each, and outlines their major discriminatory features. Numerical values used for tax rates are reported in Chapter 5.

An overview of the 1973 Tax/Subsidy System in the Model

In the 1973 public sector accounts used in the model gross tax revenues are £25.0 billion and expenditures on subsidies are £5.3 billion. UK NNP in our data for 1973 is £69.8 billion. 35.8% of NNP is collected in taxes and 7.6% paid in subsidies. The major taxes are income tax (£7.3 billion in 1973), specific excises (chiefly on hydrocarbon oil, tobacco, and drink; a combined total of £3.9 billion), national insurance and related contributions (£3.9 billion), corporation tax (£3.2 billion), rates (£2.6 billion), and value added tax (£2.2 billion). The major subsidies are those to local authority housing (£3.1 billion) and nationalized industries (£1.4 billion). These are listed in Table 3.1 along with the major features of each and their treatment in the model.

Each of these is treated as an ad valorem tax or subsidy. Some are treated as taxes on factor use with differential rates by industry, some are production taxes on intermediate use, some are consumer taxes on commodity purchases, and some tax incomes of consumers. The model treatment adopted for each tax and subsidy is motivated primarily by the discriminatory features which each introduces.

Type
Chapter
Information
Publisher: Cambridge University Press
Print publication year: 1985

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×