Simplification is the key - Centre for Policy Studies

GUIDING PRINCIPLES
The following guiding principles have been adopted for this paper, notably that:
(i)
lasting affordability, equality, generational fairness and simplicity (particularly in
respect of tax) are desirable;
(ii)
customer need and the national interest (including the need to reduce the deficit)
should override commercial interests;
(iii)
the tax framework should not distort rational, economic decision making. There
should be no double taxation and no disincentives in respect of long-term saving;
(iv)
proposals should not rely on costs being deferred, in keeping with generational
fairness;
(v)
to reduce the scope for inaccuracy, cashflow projections (requiring some
simplifying assumptions to be made) should be comparative, i.e. compared with the
pre-proposal cashflows using the same underlying assumptions. Furthermore, for
clarity, they should be expressed in terms of today’s money; and
(vi)
it is desirable to minimise rules. They add to complexity, there are usually ways
around them and they offend libertarian instincts. That said, the state has a right to
protect taxpayers’ interests.
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