Lowering taxes increases revenue — 2 examples
“We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” Winston S. Churchill
I am a believer in low taxes as an efficient way of increasing revenue.
I believe that if people and businesses keep more of their own money (pay less in tax), they can then save, spend or invest it in the wider economy.
This free exchange increases peoples’ and businesses’ ability to consume goods and services provided by entrepreneurs; creating jobs and boosting economic growth in the process.
There are others who believe that if you simply increase the tax burden on people and business (essentially people because businesses merely collect taxes), you automatically and exponentially increase your tax revenue.
This may work with low rates of taxes, but not at the level we have in the United Kingdom today. Another article will cover that…
Successes for free enterprise — 2 examples
Figures released today by the Office for National Statistics (“ONS”) prove that lower taxes legislated under the Conservative Government have delivered increased revenue. Good for business…
The report titled, “Public Sector Finances, September 2015”, shows that both income-tax related payments and corporation tax receipts have increased in the financial year to date (April 2015 to September 2015) compared to the same period last year.
· Income Tax receipts increased by £3.1 billion, or 4.2%, to £76.9 billion; and
· Corporation Tax receipts increased by £1.5 billion, or 7.9%, to £20.3 billion.
Last year during the same period, the rate of Corporation Tax was 21%. From April this year it is 20%.
Last year the Personal Allowance was £10,000. From April this year it is £10,600. (This increase more than compensates for the drop of £80 between the 20% and 40% rates year on year).
Enterprise and people free from Government’s grip will always yield better conditions for economic prosperity. Governments should therefore focus on low levels of taxation. It is human nature to strive for more if you know that you will keep more of the what you make.
I am glad we are committed to moving towards a low tax, low welfare economy. The economic benefits, as demonstrated above, are clear.
The ONS report which contains the data mentioned in this article can be found here.