Should young people pay less tax? With Dr Julian Limberg

[upbeat music] I'm Conor Naylor, senior researcher at the Intergenerational Foundation. We're a research charity fighting for a fairer deal for younger and future generations in the UK. We work on some of the big policy challenges shaping the lives of younger people, from housing and student finance to taxation, the labor market, and the environment. Our work focuses on exposing intergenerational unfairness and trying to propose practical evidence-based reforms. In this new podcast series, we'll be speaking to some of the UK's leading experts on the issues that matter most to younger and future generations. My guest today is Dr. Julian Limberg, senior lecturer in public policy at King's College London, who specializes in tax policy and inequality. Julian, thank you for joining us.

Thanks so much for having me.

So as an academic working on issues of taxation and the politics of taxation, I'm keen to hear about how you first came to the topic and why you're interested in it.

So I started studying, actually, comparative political economy. It's a field in political science that is very much interested in what the state does and mostly focuses, actually, on the spending side. And I found that interesting, but at some point I just thought, "Well, how do they actually fund all of these things?" And in political science, that was a topic that wasn't that prominent. It was mostly done s- mostly by economists, I would say. But kind of the political processes, ideas, interests, institutions shaping tax policy were not that prominent.

Mm-hmm.

So became interested in that and started my PhD working on, on this issue. Yeah.

That's fantastic. No, and I think it is something that I'm sure we'll come to later today, is that tax is a political issue. It's not a technical issue. Well, it's partly a technical issue, but it's primarily political. So you've written extensively in the past on how tax policy shapes inequality. So I think in one of your recent papers, you found that large tax cuts for the rich tended to actually increase income inequality, but didn't produce any positive results in terms of employment or growth.

Mm-hmm.

So I suppose to start us at the broadest level, what is the relationship between tax policy and inequality in countries like the UK and other advanced economies?

Yes. So we, I think we can think about this in two ways, thinking like a political economist, [laughs] basically. One way is, of course, how tax policy, policy shapes, uh, inequality. And we know that, as you already mentioned, we looked at tax policies, taxes on the rich. And actually, we've seen in the last 40, 50 years a lot of reforms that reduce taxes on the rich quite substantially. And we were interested what are actually the effects. A- and there we saw exactly, um, what you said, that looking at income inequality, there was an increase in income inequality in those countries that did these reforms and not so much in terms of, like, economic development. And we also know that with overall tax levels, not just on the, on the rich, that those countries that actually tax more tend to have, uh, lower levels of inequality. Crucially, though, the effect can also go the other way,