LONDON — Prime Minister Liz Truss of Britain on Friday gambled that a hefty dose of tax cuts, deregulation and free-market economics could reignite growth before the next general election as her government unveiled a package of measures that is likely to determine its electoral success or failure.
Breaking sharply with the era of the previous prime minister, Boris Johnson, the new chancellor of the Exchequer, Kwasi Kwarteng, promised the dawn of a new age of lower taxation, with the scrapping of one planned tax rise and the reduction of levies on home purchases to try to fire up the real estate market.
Mr. Kwarteng abandoned a proposed rise in corporate taxation and, in a surprise move, also abolished the top rate of 45 percent of income tax applied to those earning more than 150,000 pounds, or about $169,000, a year. He also cut the basic rate for lower earners.
“We will focus on growth, even when that means taking difficult decisions,” Mr. Kwarteng told a packed House of Commons. “None of this is going to happen overnight, but today we are publishing our growth plan that sets out a new approach for this new era.”
The focus on tax cuts to grow the economy “is how we will turn this vicious cycle of stagnation into a virtuous cycle of growth,” he added.
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Some dispute the comparison because the plans announced on Friday are likely to mean a large increase in government borrowing, at a time of rising interest rates, because there has been no indication of big spending cuts. While Thatcher was a committed tax cutter, she believed in balancing the books first. » | Stephen Castle and Eshe Nelson | Friday, September 23, 2022
Just when you thought we had reached the bottom with BoJo, along comes Truss to disabuse us of any such notion! At least it will be a smooth ride for the super rich! That's some consolation, I suppose. The rest will be able to look on! – © Mark Alexander
