Taxation Essay Example | Topics and Well Written Essays - 2000 words - 9

Taxation - Essay Example Taxation of household savings is really critical to the economy of UK. A look into the current tax system in the UK is hence crucial. This book tax by design is hence a crucial and explanative way of approach in this matter. The motive is to find out the core aspects on which a twenty first century tax system can be based on and then use them in making applications in advocating stringent policy enforcement to make improvements to the United Kingdom tax system. To that end, aspects relating to economic theory and vital studies can be used to explain the effect of the tax system on persons traits and the outcome tradeoffs which people who make policies have to do between the numerous and conflicting goals which they can aim for the tax system to attain (Adam 2005, p.19). This is essential since household savings is critical in any worker’s lifetime. In doing this, we follow in the trail of the Meade Report which concentrated on the framework and reform of tax and has been criti cal in the dynamic issue of taxation policy in the UK. Moreover, the canvas is broader than expected, covering most of the tax system and certain areas of relationship with the social security and credit systems which can be affected by taxation. Persons do not only have the choice in financial assets. They could also invest in their self human capital, that is, knowledge and expertise. Such investment shall earn a return in the long term, just as savings could earn a return. There is no specific motive why we can wish to interfere with persons decisions between these two types of investment. In certain scenarios, a savings neutral treating of human capital may take place in a fairly natural manner. Moreover, no tax can be charged at the time the investment takes place (Adam 2005, p.28). The return can be taxed only when revenue from the investment can be earned. Savings-neutral taxing of financial investment can then make things even