Ms Cora O'Brien:

One part of tax policy and law, known as behavioural economics, is where one tries to foresee the reactions of people or companies to certain steps one may take. The reason is that changing the rules can and does have consequences. Four or five years ago, the United Kingdom raised its marginal income tax rate to 50 pence in the pound. National insurance contributions were not increased. After a year or two, it was noted that the estimates of how much the new rate would raise for the UK Exchequer had not been realised. This was the result of behavioural change by the people at which the increase has been targeted.