The 10% tax rate: where next?

In Budget 2007, the Government announced the abolition of the 10% starting rate of income tax alongside a wider set of reforms to personal taxes and tax credits to take effect during the period April 2008 to April 2010. Further changes to tax credits and state benefits were announced in PBR 2007 and Budget 2008, some to take effect in 2008-09, some in 2009-10 and others in 2010-11. During April 2008, the Government said that it was looking at ways of compensating the net losers from these changes (in practice, those for whom the losses from the abolition of the 10% band exceeded the gains from the other measures). On 13 May it announced a £600 rise in the income tax personal allowance for 2008-09, with a corresponding cut in the higher-rate threshold. In the light of these changes, this note looks at: * To what extent the rise in the personal allowance, and other measures in Budget 2007, PBR 2007 and Budget 2008, compensate those who lost out from the abolition of the 10% rate of income tax; * To what extent the Government's pre-announced changes to personal taxes, tax credits and benefits for 2010-11 provide compensation for these losers over the medium term; * What options the Government has for 2009-10 and beyond

Job changes and hours changes: understanding the path of labor supply adjustment

We use British panel data to investigate single women’s labor supply changes in response to three reforms that affected individuals’ work incentives. We use these reforms to identify changes in labor supply. There is evidence of small hours of work effects for two of such reforms. A third reform in 1999 instead led to a significant increase in single mothers’ hours of work. The mechanism by which the labor supply adjustments were made occurred largely through job changes rather than hours changes with the same employer. This is little overall effect of the reforms on wages

Evaluating the labour market impact of Working Families' Tax Credit using difference-in-differences

A difference-in-differences methodology cannot identify the labour market impact of WFTC alone because other taxes and benefits changed at the same time as its introduction. However, a comparison of the change in employment rates for parents against adults without children should underestimate any positive labour supply impact of WFTC for lone parents. Using two different household surveys, we find WFTC and associated reforms increased lone parents' employment by around 3.6 percentage points (ppt). For couples with children, we find that WFTC and associated reforms had no significant effect on mothers' employment, and was associated with a -0.5ppt change in fathers' employment, with the reforms encouraging households to have one earner rather than two. Overall, these changes correspond to between 25,000 and 59,000 extra workers depending upon the data source used. Robustness analysis of our identifying assumptions is generally favourable to our conclusions for lone parents

Job changes, hours changes, and the path of labour supply adjustment

This paper uses the first twelve waves of the British Household Panel Survey covering the period 1991-2002 to investigate single women’s labour supply changes in response to three tax and benefit policy reforms that occurred in the 1990s. We find evidence of small labour supply effects for two of such reforms. A third reform in 1999 instead led to a significant increase in single mothers’ hours of work. This increase was primarily driven by women who changed job, suggesting that labour supply adjustments within a job are harder than across jobs. The presence of hours inflexibility within jobs and labour supply adjustments through job mobility are strongly confirmed when we look at hours changes by stated labour supply preferences. Finally, we find little overall effect on wages

The impact of tax and benefit changes between April 2000 and April 2003 on parents' labour supply

This Briefing Note provides the first published estimates of the labour market impact of the new tax credits, and the tax and benefit reforms that preceded them, on families with children. Specifically, this note examines all personal tax and benefit reforms introduced between April 2000 and April 2003. We use a structural model of labour supply to examine how these changes affect both the participation rate (the proportion of parents who would like to work at a given hourly wage) and the average weekly hours of work. We examine how the impact varies between lone mothers and adults in couples with children, and how it varies with both the number of children and the age of the youngest child in the family

Hypersonic cruise aircraft propulsion integration study, volume 1

A hypersonic cruise transport conceptual design is described. The integration of the subsonic, supersonic, and hypersonic propulsion systems with the aerodynamic design of the airframe is emphasized. An evaluation of various configurations of aircraft and propulsion integration concepts, and selection and refinement of a final design are given. This configuration was used as a baseline to compare two propulsion concepts - one using a fixed geometry dual combustion mode scramjet and the other a variable geometry ramjet engine. Both concepts used turbojet engines for takeoff, landing and acceleration to supersonic speed

Micro-simulating child poverty in 2010 and 2020

The 2008 Pre-Budget Report (PBR) said that 'the Government will take stock of progress towards its 2010 and 2020 child poverty target in the [2009] Budget'. As background to that exercise, this paper updates our previous analysis of the prospects for child poverty in the UK in 2010-11 and 2020-21

Minimum energy, liquid hydrogen supersonic cruise vehicle study

The potential was examined of hydrogen-fueled supersonic vehicles designed for cruise at Mach 2.7 and at Mach 2.2. The aerodynamic, weight, and propulsion characteristics of a previously established design of a LH2 fueled, Mach 2.7 supersonic cruise vehicle (SCV) were critically reviewed and updated. The design of a Mach 2.2 SCV was established on a corresponding basis. These baseline designs were then studied to determine the potential of minimizing energy expenditure in performing their design mission, and to explore the effect of fuel price and noise restriction on their design and operating performance. The baseline designs of LH2 fueled aircraft were than compared with equivalent designs of jet A (conventional hydrocarbon) fueled SCV's. Use of liquid hydrogen for fuel for the subject aircraft provides significant advantages in performance, cost, noise, pollution, sonic boom, and energy utilization

Study of LH2 fueled subsonic passenger transport aircraft

The potential of using liquid hydrogen as fuel in subsonic transport aircraft was investigated to explore an expanded matrix of passenger aircraft sizes. Aircraft capable of carrying 130 passengers 2,780 km (1500 n.mi.); 200 passengers 5,560 km (3000 n.mi.); and 400 passengers on a 9,265 km (5000 n.mi.) radius mission, were designed parametrically. Both liquid hydrogen and conventionally fueled versions were generated for each payload/range in order that comparisons could be made. Aircraft in each mission category were compared on the basis of weight, size, cost, energy utilization, and noise

Study of active cooling for supersonic transports

The potential benefits of using the fuel heat sink of hydrogen fueled supersonic transports for cooling large portions of the aircraft wing and fuselage are examined. The heat transfer would be accomplished by using an intermediate fluid such as an ethylene glycol-water solution. Some of the advantages of the system are: (1) reduced costs by using aluminum in place of titanium, (2) reduced cabin heat loads, and (3) more favorable environmental conditions for the aircraft systems. A liquid hydrogen fueled, Mach 2.7 supersonic transport aircraft design was used for the reference uncooled vehicle. The cooled aircraft designs were analyzed to determine their heat sink capability, the extent and location of feasible cooled surfaces, and the coolant passage size and spacing