Senior Policy Adviser Indirect Tax, London, HM Revenue and Customs.
Also, indirect tax rises increase the general price level.
The heaviest indirect tax, which goes to the national government, is the value-added tax (VAT).
Per contra, an indirect tax rise increases the cost of existing consumption, causing individuals to reduce their purchases of the now more expensive goods and services, thus narrowing the indirect tax base.
But they make up for it with high rates of income tax, indirect tax, and social-security contributions.
We are confident that by stimulating retail activity across the country the exchequer would increase the direct and indirect tax take".
The study looked at the cumulative effects of changes to direct and indirect tax and cuts to services as well as social security benefits.
Thirdly, the model includes only two-thirds of benefits and tax credit changes and what is described as a majority of direct and indirect tax announcements.
High unemployment in most of Europe should contain the potential for wages to push higher, while indirect tax rises might hold down spending, he said.
Now the Labour government says it can give figures only for direct taxes, since the indirect tax burden cannot be accurately split up between different types of family.
Nor will it become the next California, voting for budget-busting tax cuts: the union has only marginal powers over indirect tax rates.
