Increase taxes or reduce public spending?

Ten key facts related to taxes and the public finances that will underlie the fiscal policy challenges and choices faced by citizens and governments in coming years are highlighted in a new report written by Institute for Fiscal Studies (IFS) researchers and in partnership with Nesta.

Helen Miller author of the report and head of tax and deputy director at the IFS said: ‘The tax and spend choices that face future governments are not enviable. The big picture choice effectively boils down to increase taxes or reduce the size of the state.

‘Living standards are shaped not only by how much tax revenue is raised and what it is spent on but also by how it is raised. It is hard to think of a tax that doesn’t need serious reform. Employment income is penalised relative to the incomes people get from running a business or...