Breakingviews
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LONDON (Reuters Breakingviews) - At budget time, finance ministers sometimes cite the words of Jean-Baptiste Colbert, Louis XIV’s finance minister, that “the art of taxation consists in so plucking the goose as to obtain the largest possible quantity of feathers with the smallest possible amount of hissing”. In truth, fiscal policymakers nowadays tend to see taxation as a science rather than an art.
People walk over Waterloo Bridge, amidst the coronavirus disease (COVID-19) outbreak in London, Britain, February 5, 2021.
The UK Treasury has estimated that the income tax rate for high earners which brings in the most revenue is 45% to 50% and that increasing the rate by 10 percentage points reduces the amount the wealthy work by over 7%. If a typical developed country wants to cut cigarette consumption by 4%, it needs to raise taxes on tobacco by around 13%, the International Monetary Fund says.