Chippy_boy
Well-Known Member
I'm tempted to agree with that. As I said in a previous post, I would rather they had targeted the lowest paid and those on income support.The problem is that the significant tax cuts only effect those with very high incomes who are relatively small in number and plenty of which will simply stash their windfall away.
The more modest tax cuts awarded to the lower income tax payers who are larger in number and far more likely to spend any surplus will be more than eaten up by the increased bills everyone is facing..
Kwarteng's policy cannot therefore stimulate the economy.
However I am not so stupid as to think the the 45% to 40% cut was to rewards their chums, as some (all) of the bitter lefties seem to think. (Many "chums" are so loaded as to not notice anyway).
Not being part of government, I cannot say what the intention was, but I imagine it is to make the UK a more appealing place for inwards investment. Company directors are more likely to want to be based where tax rates are lower. So I think it's more to do with that (ditto the corporation tax change) than imagining all the money will naturally be spent at Waitrose.
There's also the issue that very rich people are more likely to just stump up and pay their 40%, rather than arrange their finances in complex ways in order to avoid paying it at all... which is what happens when rates go too high.