Trickle-down might not, but if you get the economy firing, encourage wealth into the country, you can then bring in taxes at high levels to introduce more equality. Economic stagnation benefits nobody.
S1:10 to the £ now. Wow. €1:13. altogether now ‘makes our exports more competitive’ ie cheaper. Also makes our imports more expensive, more inflation! Yay! As the only major economy taking this approach I suppose we should expect the ‘markets’ to be dubious. Irony being that we are trusting the ‘markets’ to make this voodoo work.
The 45% issue benefits 600000 who admittedly don’t need help. The 19% issue helps 30 million many of who will spend the extra
The 1p reduction would amount to annual tax savings of £74 for workers earning £20,000, £174 for someone earning £30,000 and £374 for someone with a £50,000 pay packet. It would work out to a £674 and £874 saving for employees with an income of £80,000 and £100,000, respectively. Meanwhile, those earning £1 million annually will get a £55,000 tax cut next year.
It will help 30 million by a negligible amount, most of whom are barely getting by month to month. Call it £15 a month for the median average earner. Welcome but not really a dent in the cost of living.
Presumably the 1% cut in the 20p costs HMT a heck of a lot more. And those who benefit need the savings a lot more. I'm sure I remember reading that the drop from 50p to 45p in the top rate cost very very little - as people start to make tax efficient decisions (dump loads into pension etc) when the tax rate is above 50% (don't forget there are taxes on top of income tax like NI).
I doubt any country in Europe will avoid recession, save perhaps Hungary that gets preferential energy rates from Russia. You have to encourage wealth into the country, otherwise you have **** all to tax. In the 1970's, Labour (Dennis Healey) taxed UK investors at 98 pence in the pound. It may have made those who had no money to invest feel better, but it was a disaster for the economy. Wealthy people took money offshore. Thatcher showed that by taxing less, government gets a better income.
I’d increase VAT on luxury goods so if you live here and spend we get it back regardless on how and where you earn it
Thatcher cut income tax early in her time. But she doubled VAT from 8% to 15%, raised National Insurance, and local taxes, all regressive taxes which hit the worse off harder. So it can’t be claimed that her tax cuts increased government income - unless you can find evidence to back this up (I can’t). The results of her policies was inflation reducing, but very high unemployment and low industry investment for years. In fact by about 1984 she had abandoned the policies of monetarism but kept the rhetoric. We were back in another recession when her mates kicked her out. What she didn’t do was borrow huge amounts, she believed in balancing the books. She was helped in this by the benefits of North Sea oil and high oil prices keeping the £ strong. She also added to her coffers by selling off the state’s wealth - a one time only binge of privatisation. We don’t seem to be following the same script now.
https://www.forbes.com/sites/nathan...h-to-a-19-corporate-tax-rate/?sh=52671b18772e The third para of this is the point I was making
In my experience of working with an in big businesses, the headline rate of corporation tax can be less important than the incentives that sit underneath it - what tax credits are in place for things like R&D, capital allowances that are in place or not, what allowable expenses can be deducted before paying corporation tax, how share schemes can mitigate it etc. Some countries like Ireland have a good headline tax rate, but are also really good at the 'second level' of details that we need to get right. Not sure how the UK compares tbh, but thought I'd chuck the nuance into the discussion.
