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Because they believe that tax cuts will ultimately stimulate the economy at a time when people are experiencing increased cost of living. If that is correct th

Because they believe that tax cuts will ultimately stimulate the economy at a time when people are experiencing increased cost of living. If that is correct then they should hold on through market wobbles and some heat in the media as economic growth will ultimately pay for it. Im not defending the specific implementation and timing, but the theory is sound.

pooper 4y ago
> Because they believe that tax cuts will ultimately stimulate the economy at a time when people are experiencing increased cost of living. It doesn't make any sense from what I understand because we are raising interest rates to cool down the economy and lowering taxes to heat up the economy. I am not an economist but I think we should be pushing in the same general direction.
- neilwilson 4y ago
  Interest rates move the Inflation Tax to the Mortgage Tax. That's the idea. What the government has done is cut corporate taxes and left it to the Bank of England to raise the Mortgage tax. Those paying for the government's investment idea will be those paying mortgages and those selling houses. There's no difference here to cutting corporation tax and putting up income tax to compensate.
zarzavat 4y ago
Not really because the changes caused higher (anticipated) interest rates which will have the opposite effect on the economy. Also removing the 45% tax rate would not have had any measurable impact on the economy aside from the aforementioned negative one, it was just a pointless handout (hence the crisis of confidence). What the government actually needs to do is to get back confidence so that interest rates don’t have to go so high to compensate for the loss of confidence. They could do that by walking back the changes and appointing an experienced and “safe” chancellor.
- neilwilson 4y ago
  High interest rates is the point of the change. Those in charge believe low interest rates discourage investment.
  - shapefrog 4y ago
    The campaign promise was to increase interest rates - even going as far as removing the central bank and raising the rates themselves.
    - neilwilson 4y ago
      Not so much removing the central bank as instructing them directly - as they have the power to do under s12 and s19 of the Bank of England Act 1998

pooper 4y ago

> Because they believe that tax cuts will ultimately stimulate the economy at a time when people are experiencing increased cost of living. It doesn't make any sense from what I understand because we are raising interest rates to cool down the economy and lowering taxes to heat up the economy. I am not an economist but I think we should be pushing in the same general direction.

neilwilson 4y ago
Interest rates move the Inflation Tax to the Mortgage Tax. That's the idea. What the government has done is cut corporate taxes and left it to the Bank of England to raise the Mortgage tax. Those paying for the government's investment idea will be those paying mortgages and those selling houses. There's no difference here to cutting corporation tax and putting up income tax to compensate.

zarzavat 4y ago

Not really because the changes caused higher (anticipated) interest rates which will have the opposite effect on the economy. Also removing the 45% tax rate would not have had any measurable impact on the economy aside from the aforementioned negative one, it was just a pointless handout (hence the crisis of confidence). What the government actually needs to do is to get back confidence so that interest rates don’t have to go so high to compensate for the loss of confidence. They could do that by walking back the changes and appointing an experienced and “safe” chancellor.

neilwilson 4y ago
High interest rates is the point of the change. Those in charge believe low interest rates discourage investment.
- shapefrog 4y ago
  The campaign promise was to increase interest rates - even going as far as removing the central bank and raising the rates themselves.
  - neilwilson 4y ago
    Not so much removing the central bank as instructing them directly - as they have the power to do under s12 and s19 of the Bank of England Act 1998