The determinants of the forms of income tax legislation 1907-65: Their ascertainment and importance

Abstract

In 1907, income tax was unequivocally declared permanent; and, in 1965, the introduction of corporation tax affected the scope of that tax. This thesis investigates the forms of income tax legislation between those dates with the aim of ascertaining the determinants of those forms and assessing their importance. The forms of income tax legislation are divided into primary and subordinate legislation; and (within primary legislation) into Finance Acts, programme Acts, Consolidation Acts and Codification Acts. The government had insufficient parliamentary time to enact all the primary legislation that it wished; and some forms of primary legislation were better placed for enactment than others. The result was that the United Kingdom polity (an expression used to denote the state considered as a political entity) operated with a default setting under which the government’s legislation was enacted only in part, and with the different forms of primary legislation being used to a very unequal extent. This default setting was overridden only rarely; and only in part could subordinate legislation make good the shortfall in primary legislation. It is concluded that the business that the United Kingdom polity could usefully transact exceeded its capacity to transact that business. Business was likely to be favoured if it was easy to implement, urgent, or had important champions; and decisions to be taken for short-term reasons. These conclusions explain the lopsided manner in which income tax was enacted and other features of the law and practice relating to income tax. The conclusions may also hold good for other areas of government activity where there was much legislation; and are consistent with the view that the two world wars were of major importance for the development of the United Kingdom polity during this period.