UK tax cut cuts right drug for productivity: Economist


As British Prime Minister Liz Truss’ tax cuts come under fire from financial institutions and the media, one Australian economist said it was a step in the right direction, but more needs to be done to curb spending. It says there is

The Truss government supports tax cuts and reductions in stamp duty (a type of property tax) to encourage economic activity. However, in response to the move, financial institutions such as the Bank of England and the International Monetary Fund urged the Truss and Finance Minister Kwasi Kwarten to reverse or delay the move.

“Given the mounting inflationary pressures in many countries, including the United Kingdom, it is important that fiscal policy does not operate in a cross-purpose with monetary policy, so large-scale, untargeted fiscal policy at this time do not recommend spokesperson Statement by the IMF.

The press reacted with nuances, calling Prime Minister Truss “Trickle Down Economics” or “Trasonomics”. always fail.

But John Humphries, chief economist at the Australian Taxpayers Union, supports the move, saying the Truss government is right to focus on tax cuts as part of its “sustainable productivity agenda”.

“It’s also good to see them addressing the over-regulation of the UK economy. All this is good microeconomic policy leading to higher wages, more jobs and lower prices.” He told the Epoch Times in an email.

“The media critics who are concerned about huge budget deficits and over-borrowing are right. But they are quick to point out that tax increases are the only solution, and a better solution is for the Truss government to seek ways to cut wasteful spending.” I think that’s what it is.”

The Truss government will also borrow to finance a £100bn package to cover some of the family’s energy bills amid soaring prices.

Humphries also said the term “trickle-down economics” is usually attributed to former President Ronald Reagan’s tenure and used to denigrate free markets and capitalism. rice field.

“The term ‘trickle-down economics’ is meaningless and only used disparagingly by the ideological left in crafting Strowman’s arguments against capitalism,” he said. “The current issue is the importance of microeconomic reforms to reduce market distortions and improve market competition. This can be achieved by reducing distorting taxes and regulations.”

Daniel Y. Teng

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Daniel Y. Teng is based in Sydney. His focus is on national politics such as federal politics, the COVID-19 response and Australia-China relations. Any tips? Please contact [email protected]