Autumn Statement: Hunt Does Not Rule Out Income Tax Cuts

Chancellor Jeremy Hunt has not ruled out cutting income tax in Wednesday's Autumn Statement, as he insisted economic growth was his priority.
Read the BBC aricle here.

This man is trying to take credit for bringing inflation down. He shouldn’t. Inflation is still raging. Any decrease in inflation so far has happened because energy prices have come down, prices over which he has no control. There has been little or no decrease in inflation as a result of Hunt’s efforts. He is merely trying to hoodwink the electorate.

The main reason for the sharp drop in inflation as measured by the consumer prices index was that the increase in energy prices in October 2022 was not repeated. Gas prices fell by 7% last month, having risen by almost 37% in the same month a year earlier. [Source: The Guradian]

Further, if Mr Hunt is wise, if there is any room for tax cuts, he should aim those tax cuts not at the superrich, but at the man in the street. And if economic growth is your goal, encourage spending on consumer goods, not superyachts and private jets! If you bring about tax cuts for the wealthy at this time of great hardship for the many, the elctorate will never forgive either you or the Tories.– © Mark Alexander

IMF Criticises Kwarteng Again over Tax Cuts and Energy Package

THE GUARDIAN: Fund says chancellor’s measures have made Bank of England’s battle against inflation more difficult

Kwasi Kwarteng has come under fresh fire from the International Monetary Fund after the Washington-based organisation said his tax cuts and energy support package had made the Bank of England’s battle against inflation more difficult.

The IMF used its prestigious world economic outlook (WEO) to criticise the scale of the stimulus provided by the chancellor and the blanket nature of the price cap on gas and electricity bills.

It said the UK was on course for a sizeable slowdown in growth from 3.6% this year to 0.3% in 2023 but said its forecasts had been made before Kwarteng delivered his mini-budget on 23 September. » | Larry Elliott in Washington | Tuesday, October 11, 2022

Tax U-turn Wins Truss Some Time but Damage to Credibility Remains

THE GUARDIAN: PM said she was prepared to make unpopular decisions – but then buckled, so now she will be seen as both unpopular and wrong

It was seen as electoral suicide to cut taxes for the rich, and a succession of bad polls for the Tories bore that view out. Photograph: Tolga Akmen/EPA
ANALYSIS
So it turns out the lady was for turning, after all. Just hours after Liz Truss declared on national television that she would stand by her controversial plan to scrap the 45p top tax rate, she dumped it.

The decision came in crisis talks with her chancellor, Kwasi Kwarteng, late on Sunday night, after the prime minister spent the evening touring fringe events at the Tory party conference.

It was clear to anybody with even an ounce of political foresight that the U-turn was inevitable. Rebellious Tory MPs, led by former cabinet minister Michael Gove, had made it clear they would vote against the 45p rate cut, undeterred by threats to strip them of the whip.

They warned of the “un-Conservative” risk of using borrowed money to fund tax cuts and the broader fiscal turbulence unleashed by the uncertainty around the mini-budget. The Tories, they feared, had permanently broken the link with economic competence.

But it was the politics that caused the deepest unease. At a time when people are struggling with the costs of living, and the government is planning further public spending cuts, focusing on welfare, it was seen as electoral suicide to cut taxes for the rich. A succession of bad polls for the Tories bore that view out. » | Pippa Crerar, Political editor | Monday, October 3, 2022

Liz Truss Abandons Plan to Scrap 45p Top Rate of Income Tax amid Tory Revolt

THE GUARDIAN: Government makes U-turn over proposal to abolish top-rate tax cut after growing backlash over mini-budget

Liz Truss and Kwasi Kwarteng on Sunday, the first day of the Conservative party conference in Birmingham. Photograph: Leon Neal/Getty Images
Liz Truss’s government has abandoned its plan to abolish the 45% top rate of income tax in a humiliating U-turn, after a growing Conservative revolt over the policy and a turbulent reaction from markets.

Announcing the decision in an early morning tweet on Monday, Kwasi Kwarteng said: “We get it, and we have listened.”

The chancellor said the decision to cut tax for people on incomes of £150,000 or more “has become a distraction from our overriding mission to tackle the challenges facing our country”.

He continued: “As a result, I’m announcing we are not proceeding with the abolition of the 45p tax rate.”

But in a round of broadcast interviews hours before he was due to address the Conservative conference in Birmingham, Kwarteng denied his mini-budget 10 days ago had been a mistake, despite its impact on the pound and on the cost of government debt, which in turn has made mortgages more expensive. » | Peter Walker and Virginia Harrison | Monday, October 3, 2022

I should damn well think so too! Giving tax cuts to the superrich at a time when so many people are suffering, having to go to foodbanks to feed their children and many having to choose between heating and eating, would have been totally and utterly unconscionable. – © Mark Alexander

Cost of Living Crisis Worsens in UK; Liz Truss's Approval Ratings Plunge | World News | WION

It has been barely a month since Liz Truss took over the reins from Boris Johnson as the UK’s Prime Minister and it seems that she is already facing a major crisis. According to the Observer poll, the approval ratings of Liz Truss and the Tories have plunged.

‘Cruel and Greedy’: High Earners on Kwasi Kwarteng Ditching Top Tax Rate

THE GUARDIAN: Seven people in 45% tax bracket that chancellor is abolishing share how they feel about decision

International markets, voters, members of the Conservative party and experts have reacted with dismay to Kwasi Kwarteng’s “fiscal event” last Friday, when the chancellor announced that the top tax rate of 45% would be abolished.

Here, seven high earners who will benefit from this tax cut share how they feel about it, and what they will do with the money. » | Jedidajah Otte | Saturday, October 1, 2022

Lizzie makes Maggie look like the fairy godmother! Maggie’s family background was steeped in Christianity, so despite her being somewhat hard-nosed at times, her Christianity showed through from time to time, too. The same cannot be said for Lizzie. Lizzie is clearly hard of heart: she clearly has a total lack of compassion for the less fortunate. The needy and poor are so obviously off her radar screen. Not much Christianity to be discerned there! Has she even read the Bible, I wonder? Does she have any understanding of its message?

I would urge her to consider the following two verses from the Bible. The same goes for Kwasi Kwarteng:

The righteous considereth the cause of the poor: but the wicked regardeth not to know it. KJB Proverbs 29:7

For the poor shall never cease out of the land: therefore I command thee, saying, Thou shalt open thine hand wide unto thy brother, to thy poor, and to thy needy, in thy land. KJB Deuteronomy 15:11

If Lizzie goes on like this, showing no mercy or compassion for the less fortunate, I cannot see her surviving in office for very long. – © Mark Alexander

Source of Bible quotes: King James Bible Online.

UK Prime Minister Liz Truss Grilled over Tax Cuts in Local Radio Interviews - BBC News

Prime Minister Liz Truss has defended the new government’s economic policies in a series of interviews with BBC Local Radio stations.

Eight local radio presenters put questions and concerns to the prime minister, who has said her government needs to continue to "deliver economic growth, jobs and opportunities".


Related podcast.

Liz Truss is a heartless woman. It is clear that she has no feeling for the less fortunate, or compassion. How can it be right to cut taxes for the superrich when young families are struggling to put food on the table for their children? Often, to do so, they have to go to food banks! This in the United Kingdom in 2022! This is morally indefensible; in fact, it is an outrage!

It is high time that our prime minister, whoever it is, and regardless of stripe, concentrate on ensuring that people have adequate money to live each week. Living from hand-to-mouth is not an acceptable aim for them for any prime minister of the United Kingdom in the modern age.

We like to think of ourselves as a Christian nation, however loosely that might be defined. Yet we allow people to go to bed at night underfed and cold, especially in winter. I wonder how many old people will die of hypothermia this winter? I would suggest that it is high time that our prime minister concentrate on eradicating poverty rather than concentrate on enriching further the superrich!

By the way, Madame Truss, cutting taxes for the superrich WILL NOT generate significant growth in the economy. Selling a few more superyachts will do little to shore up economic activity on the high street! If you want to create growth in the economy, you need to put money into the pockets of the lower and middle classes. It is they who will generate demand for white goods, new cars, etc. The superrich will just stash most of it away. Their needs have already been taken care of. Moreover, many of them just take their money out of the country to tax havens anyway.

Madame Truss: I do declare that you are clueless! – © Mark Alexander

Tax Cuts Funded on Backs of Poor ‘Morally Indefensible’, Say Campaigners

THE GUARDIAN: Government could seek to reduce welfare benefits spending in wake of recent mini-budget

Poverty campaigners have said it would be “morally indefensible” for ministers to fund tax cuts for the richest on the backs of the poor, amid speculation that ministers may reduce welfare benefits in the wake of last week’s ill-received fiscal statement.

Friday’s mini-budget announced billions of tax cuts benefiting high earners, but the subsequent market fallout plunged the UK’s finances into near crisis. The government is expected to have to make tens of billions of pounds of public spending cuts later this year to try to put the UK’s finances on a sound footing.

With prime minister Liz Truss having made high-profile political commitments to increase defence and NHS spending, welfare is seen as a prime candidate for cuts. » | Patrick Butler, Social policy editor | Thursday, September 29, 2022

‘A reverse Robin Hood’: key exchanges from Liz Truss’s radio interviews: Memorable points from prime minister’s morning round of interviews at a glance »

Market-turmoil and Slumping British Pound after UK Government Announced Economic Plans | DW News

The new UK government's plan for huge tax cuts financed by borrowing have drawn strong criticism from the IMF. The British pound has slumped - so has London lost control of the economy? The Day put that question to Phillip Inman, economics editor of the UK's Observer newspaper.

Thom Hartmann: Has PM Liz Truss Wrecked the UK Economy? Featuring Richard Wolff

Is British prime minister Liz Truss trashing the economy of her country? A tax cut for the rich and little for the poor. The pound sterling has crashed against the dollar and the euro.

The International Monetary Fund (IMF) has publicly rebuked the UK government, which is almost unheard of.

Is the country spinning out of control financially?


Bio: Professor Richard Wolff, Economist / Co-founder, Democracy At Work / Author of numerous books including The Sickness is the System: When Capitalism Fails to Save Us from Pandemics or Itself (also available as an eBook) / Host-Economic Update w/Prof. Richard Wolff on FSTV

Kwarteng’s Tax Cuts Will Force ‘Significant’ Interest Rate Rises by Bank of England

THE GUARDIAN: Chief economist says mini-budget will increase inflationary pressure in remarks likely to further spook mortgage borrowers

The Bank of England’s chief economist, Huw Pill, says: ‘It is hard not to draw the conclusion that this [tax cuts] will require a significant monetary policy response.’ Photograph: Bloomberg/Getty Images
A senior Bank of England official has warned “significant” increases in interest rates will have to be imposed by the central bank in response to tax cuts put forward by Kwasi Kwarteng in his mini-budget.

The Bank’s chief economist, Huw Pill, said the chancellor’s planned tax cuts would act as a stimulus and increase inflationary pressures, with the result that interest rates would need to go higher than previously forecast.

“In my view, a combination of the fiscal announcements we have seen will act a stimulus to demand in the economy,” he said. “It is hard not to draw the conclusion that this will require a significant monetary policy response.”

Pill’s remarks are likely to further spook homebuyers and mortgage borrowers near the end of a fixed-rate mortgage about the cost of financing their loans. » | Phillip Inman | Tuesday, September 27, 2022

UK’s cost of borrowing on international markets overtakes Greece and Italy: Five-year British government bonds fall dramatically as traders price in higher risk of default on debt »

Pound Crashes to All-time Low as UK Chancellor Hints at More Tax Cuts

Chancellor Kwasi Kwarteng was today forced to quell growing market unease over his low-tax, high borrowing strategy with a promise to set out more details in November, along with independent costings.

The Bank of England put out a statement too, saying they wouldn't hesitate to hike interest rates at their next meeting, but neither intervention seemed to reassure city markets.

The pound slid once again this evening, having hit a historic low against the dollar earlier in a rollercoaster day.
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And amidst the turmoil - the cost of government borrowing shot up too.

Kwasi Kwarteng Mulls More Beneficial Tax Cuts for High Earners

THE GUARDIAN: Reports chancellor is considering further changes to taxation after mini-budget ‘for the rich’

The government is considering a series of further tax cuts that could hand thousands of pounds to high earners, shortly after it announced the biggest giveaway in 50 years.

Plans under consideration could include bringing back a tax-free allowance for workers paid more than £100,000 a year, and lifting the amount pensioners can save before taxes kick in, the Sunday Telegraph reported.

The chancellor, Kwasi Kwarteng, on Friday delivered a mini-budget with tax cuts that will benefit many of the highest earners in the UK. Although it was not a full budget, it represented the biggest tax-cutting fiscal event since 1972 under another Conservative chancellor, Anthony Barber. » | Jasper Jolly | Sunday, September 25, 2022

Liz Truss's Dodgy Economics

Sep 22, 2022

Liz Truss Defends Plan to Lift Cap on Bankers’ Bonuses

Read the article here.

This is the sh** that falls from the bull! Liz Truss's understanding of economics leaves much to be desired. This is yet more 'trickle-up' economics, i.e. economics which makes the rich, richer still and the poor, poorer still.

This voodoo economics will not lead to economic growth; in fact, it will probably lead to economic contraction. If policies like these led to economic growth, this country would have one of the fastest-growing economies on the planet. These neoliberal policies have been followed since Thatcher was in office back in the 80s; and look at the parlous state of the UK economy today! – © Mark Alexander

Liz Truss, the market fundamentalist »

Liz Truss urges world leaders to follow UK with trickle down economics: Reports that stamp duty will be cut with PM to use UN speech to argue for far-reaching tax reductions, putting her at odds with Joe Biden »

Trickle down economics is a load of bullshit! No economist (or politician) worth his or her salt would ever promote such a stupid theory. The theory has already been discredited. – © Mark Alexander

Interview – Ken Clarke: ‘The Idea That Tax Cuts Will Automatically Produce Growth Is Nonsense’

THE OBSERVER: The veteran Tory, who stood three times to lead his party, on the cost of living crisis, today’s political culture and the best PM we never had

Kenneth Clarke at his home in Nottingham. Photograph: Sophia Evans/The Observer
Kenneth Clarke was made Baron Clarke of Nottingham in 2020, having served as a Conservative MP for 49 years, and in a variety of government and cabinet positions, including chancellor of the exchequer and health secretary. He also stood three times for the leadership of the party, twice narrowly failing. He has cast his vote in the current Tory leadership election, but refuses to say for whom he plumped.

We’re facing a cost of living crisis, with growing inflation and the ongoing war in Ukraine. How should these problems be dealt with?
In the short term, we’ve got to go through probably a very serious economic crisis. I’ve felt for some time that we’re bound to have a very severe recession. And if we’re not careful, it’s going to be combined with very bad inflation, which does social, as well as economic damage. Brace yourself for it, but living standards generally are going to fall for the first time for a long time, and the main short-term measures should be to protect the very poor, very vulnerable and stop us seeing any increase in the number of people becoming destitute in this country. The government shouldn’t be asking themselves, what is the Daily Mail going to be saying tomorrow but what is the economy going to look like in a couple of years’ time when we have an election?

As a former chancellor of the exchequer, what do you think of the idea, put forward by Liz Truss in the Tory leadership campaign, that tax cuts will trigger economic growth?
The simplistic idea that tax cuts will automatically produce growth is nonsense. Everybody would do it if that worked. There’s a slight touch of the Argentinian or Venezuelan government about it. This is not a time for tax cuts because we have incurred enormous public expenditure, which I supported, to stave off the worst effects of Covid-19, leading to enormous public debts. Tax cuts will stimulate growth in demand, but the problems are with the difficulties in supply, so they will push inflation further up. » | Andrew Anthony | Observer New Review Q&A | Sunday, August 21, 2022

OBSERVER EDITORIAL:

The Observer view on Liz Truss and Rishi Sunak’s tax cut promises: The Conservative leadership contenders are blind to the dire lack of investment in a crumbling UK »

Labour Surges as Tory Fears Grow over Truss’s Tax Cut Agenda

THE OBSERVER: Likely PM’s policies will mean ‘big trouble’, say critics, as Starmer’s energy price initiative boosts him in polls

Liz Truss has been criticised by the former Tory chancellor Kenneth Clarke for proposing tax cuts during a time of ‘enormous public debts’. Photograph: Peter Byrne/PA
Senior Tories have warned that their party will suffer dire electoral consequences under a Liz Truss premiership that fails to address the cost of living crisis, as Labour enjoys a poll bounce suggesting Keir Starmer could be on course for No 10.

Amid signs of mounting panic among high-ranking Conservatives about Truss’s economic policies, several former cabinet ministers told the Observer on Saturday the party would suffer devastating losses in blue and red wall seats unless Truss changes tack, if and when she enters No 10.

After Michael Gove described Truss’s plan to focus on cutting taxes as a “holiday from reality” and announced he was supporting Rishi Sunak, the latest Opinium poll for the Observer gives Labour and its leader a double poll boost, days after he backed a complete freeze on energy bills this autumn. Labour now enjoys its biggest Opinium poll lead in months – eight points – while Starmer has surged well ahead of Truss in the past two weeks when voters are asked who would be the best prime minister. » | Toby Helm, Observer political editor “ | Saturday, August 20, 2022

This woman, Liz Truss, is economically illiterate. That we should even be contemplating entrusting her with the keys to Number 10 is a sad indictment of the British political system. For this cipher to wish to pursue Thatcherite policies at this time of national crisis shows me, and should show you, that she has lost the plot! The very last thng this country needs right now is more Thatcherite policies! It is an overdose of Thatcherism that has helped to land us all in this parlous state we now find ourselves in. For God's sake, don't give that woman the keys to Number 10. Doing so will be the path to this country's ruin. It will also help accelrate this country's place on the list of Third World countries. To borrow Thatcher's well-worn turn of phrase: "No! No! No!" Further, to add insult to injury, that voice of hers! Well! It's bad enough to turn the milk sour! – © Mark Alexander

Liz Truss Rejects ‘Handouts’ as Way to Tackle Cost of Living Crisis

THE GUARDIAN: Conservative leadership frontrunner insists on tax cuts despite claims they will fuel inflation

Liz Truss at an event at Solihull Moors FC, as part of the Conservative leadership campaign.Photograph: Jacob King/PA
The Conservative leadership frontrunner, Liz Truss, has rejected “handouts” as a way of helping people affected by the cost of living crisis.

Truss said she would press ahead with proposed tax cuts despite claims they would fuel inflation and “kiss goodbye” to the Conservatives’ chances of winning the next election.

With mounting pressure as households face a financial squeeze, the foreign secretary rejected handouts and insisted on tax cuts costing more than £30bn as the country spirals towards a recession.

“Of course I will look at what more can be done,” Truss told the Financial Times. “But the way I would do things is in a Conservative way of lowering the tax burden, not giving out handouts.” » | Geneva Abdul | Saturday, August 6, 2022

Clearly, Liz Truss doesn’t understand even basic economics. Tax cuts are not going to help the poor or the struggling middle class get through these tough times. Doesn’t she know that a person earning less than £12,570 per annum doesn’t pay any tax anyway; so how are tax cuts going to help these people get through this crisis?

Tax cuts are wrong for the economic crisis we are in. First of all, tax cuts would help the rich and better off and not the poor and under-privileged, and secondly, even if they were to help at the margin, it would take a long time for any benefits of tax cuts to filter through. So, what are the working poor going to do in the interim? Starve and/or freeze to death? Get a grip, Madame! – G Mark Alexander

Tax-cut Stunts Can’t Cover Up the Disaster That Is Brexit

THE GUARDIAN: Liz Truss and Rishi Sunak feel bound to talk lower spending to party members, but the former chancellor at least must see the folly of losing billions off our GDP

Liz Truss’s loathing for the EU is not lost on Brussels and Dublin. Photograph: Toby Melville/Reuters
‘They are trying to hide the failure of Brexit behind policy stunts.” This observation about the fiasco of the Conservative party’s leadership contest came from an economist friend and neatly sums it up.

Liz Truss, who voted Remain but is now an ardent Brexiter, cannot admit to herself that she was right first time, and that the trade deals she goes on about that are supposed to have made up for our crass departure from the European Union do not amount to a hill of beans.

Sunak, who was always a Brexiter, must surely have learned from his time as chancellor that the Treasury’s hostility to Brexit was right all along. He is an intelligent man but, like Truss, is fantasising about Brexit “opportunities” that the Treasury and other Whitehall departments know are chimerical.

Whichever contender succeeds the worst prime minister in living memory will have to come to terms with two fundamental consequences of Brexit. One is that the Office for Budget Responsibility’s estimate of a 4% annual loss to gross domestic product not only makes the country poorer but severely limits their tax-cutting ambitions – hers now, his later. Foolishly losing tens of billions of potential tax revenues through Brexit is not a good start to either of their ambitions.

The second is the devaluation of the pound by up to 12%, which the financial markets attribute to, yes, Brexit. This has not only made the country poorer but has also severely aggravated the inflation problem the government and Bank of England now face – with price growth running significantly higher than in most other European and G7 nations. » | William Keegan | Sunday, July 24, 2022

Private Jet Sales Are Soaring Thanks To Republicans’ Tax Cuts