The biggest impediment to growth is within the Chancellor’s gift to remove
France’s current triple dip recession not only provides the final nail in the coffin for the anti-austerity argument, but it also shows the dangers of tax rises. France under Hollande has become a hot bed of ridiculous taxes, from the proposed 75% super tax on individuals which was shot down in constitutional courts only to be revived as a tax on business, to ‘culture protecting’ taxes on smart phones. Hollande has flipped Friedman on his head and seems to be in favour of raising taxes under any circumstances and for any excuse, for any reason, whenever it’s possible. Indeed after taking over as President he said any expenditure cuts he had to make will be matched by twice as much taxation.
Britain, like France, is not cutting public spending. For all the British rhetoric Public Spending is ballooning under Osborne in fact he is set to add more debt to Britain in 5 years than Brown did in 13.
There is one reason why Britain is treading water while France is drowning: tax cuts. Osborne will end 2015 with a corporation tax rate of 20%, from 28%. The effects of Osborne’s more business friendly approach has already been seen with projects like the new Star Wars film to move to the UK for tax reasons.
Osborne hasn’t always done it right in fact he has mostly got it wrong, lowering the bar to reach the 40% tax rate was foolish and cancelled out much of the benefit of raising the personal allowance threshold, VAT rises was another mistake. As the TPA show the Tories have raised tax twice as often as they have cut them, with a whopping 299 taxes going up under the Government.
‘Austerity Britain’ with its massive increases in Public Spending and tax rises should be sinking. It is only because the Government has made some prudent tax cuts that our nose is just above water. France is not so lucky. With all the lefts rhetoric of growth they are refusing to contemplate the only thing that actually creates economic growth – cutting taxes . As tax and spend socialism collapses Economies across Europe it is the few areas of tax cuts that keep countries like Britain afloat.
If the Left were really interested in growth they should argue for sweeping tax cuts, arguing for anything else is arguing for collapse and failure.