Taxing Luxuries

In August 2021 Professor Chantal Stebbings spoke to the International Institute of Public Finance Congress (Reykjavik/online) on Taxing Luxuries in Eighteenth-Century Britain: Old Perceptions and Modern Influences. She demonstrated how taxes on luxury commodities lay at the heart of fiscal orthodoxy in Britain in the eighteenth century because they epitomised contemporary fiscal values of voluntariness and fairness, and required a light-touch administration. Because they did not reflect the true wealth of individuals, they were eventually ousted by the income tax. However, it was the luxury taxes that provided the bridge between the orthodox and modern fiscal models, and provided the conceptual innovations, constructs and institutions which were key to the successful implementation of modern direct taxation.