The economics is interesting isn't it

Taxes currently ~37% GDP. For context, Major ~29% and Blair ~33%. Taxes are massively high. Raised to cover the cost of furlough. We don't have furlough any more.

Truss tried to reduce that by ~1.8% GDP. And pledged ~170bn /6% GDP for energy cap. 1.72% for the cut to basic rate and 0.08% for the higher rate. Press focused on the 0.08% while markets focused on the 1.72% cuts and 6% extra spending.

So now we keep the ~37% GDP taxes and implement a minimal energy cap.

The thing is, 37% taxes is way too high. The difference between Major and Blair taxes above Blair. So the reversal of cuts has led to predictions of a deeper recession.

If you were dictator, what would you do?

Windfall tax on energy companies will raise circa £5bn. 0.2% GDP

Raise taxes on bankers? The 45-40% cut was 0.08% GDP. Increase it too far and you lose income due to fewer banks/bankers

Cut taxes for basic rate earners? That is what truss did...

Posted By: Timmy_Goat, Oct 17, 12:25:39