How do the incentives in the labour tax system influence taxpayer behaviour, and what is the economic cost of any relevant distortions? In particular, what are the latest estimates of fundamental elasticities such as labour demand, labour supply, etc, for different groups?

Background

The tax section concerns HM Treasury’s understanding and strategic oversight of business, environmental, transport, property, VAT, excise taxes and customs duties that together raise revenue of over £250 billion a year. This is vital to fund essential public services, while working to support the Government’s wider agenda – including building strong foundations from which to drive economic growth and make Britain a clean energy superpower.