Trevor Kavanagh’s Monday column in the Sun is always one of the week’s best reads – but today’s is even better than usual. It contains most of today’s major political and economic questions in a nutshell, and offers some useful pointers on how to resolve them. I’d recommend you read it all, but here’s a key passage from towards the end:
“One day this slump will end — but only if Britain finds new motors for economic growth to replace the bankrupt City and punch-drunk consumers.
The Tories should be asking why, if we really must double the national debt, don’t we spend it on something useful?
Like raising the starting point for income tax by £5,000 a year — instantly hauling millions out of poverty and reliance on welfare?
Why not slash National Insurance — a penal tax on jobs — and cut tax on business?
Let’s cut stamp duty and get the housing market moving again.
Economists have dreamed of such a tax and welfare revolution for years. It was just too expensive.
But so is Gordon Brown’s eye-bleeding boost for State projects.
They say every crisis offers an opportunity.
This one gives us a chance in a lifetime to create a dynamic, low-tax high-achieving economy and take on the world once it’s over.” After Brown’s wrong-headed VAT cut – and given the PM’s determination to throw public money at various problems – the question of how stimulus cash should used is one of the most intriguing of 2009. To my mind, Kavanagh’s proposals are all more or less attractive, although the most important is raising the starting point for income tax. All too little is being done for the least well off in society during this recession. Raising the starting point would be an effective way to lower the fiscal burden they face.
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