Low taxes do not necessarily mean cuts in public services

There is a great problem that politicians currently face and in particular the Conservative Party. If they say they are going to reduce taxation the public reaction is "How are you going to pay for it without cutting policemen, nurses and teachers? "The answer about cutting bureaucracy and waste does not seem to be believable. Consequently all politicians are now shy of suggesting any cuts at all.

There is much evidence that a low tax economy is a faster growing one and similarly legislation light countries have many more start up businesses. The overall tax take frequently rises with lower rates. Low income workers pay marginal rates of tax in the region of 70% so there is little incentive to work extra hours. Similarly the Government spends vast amounts collecting tax only to pay it back in tax credits. This does not seem sensible. Why not encourage people to work harder by increasing the incentive to work with rises in tax thresholds?

Another area ripe for cutting is inheritance tax. Many people of now fairly modest means are going to caught by this tax because of property values. It would be a vote winner to raise the limits. Of course any budding Chancellor will realise that although relatively small beer now inheritance tax revenue will soar in years to come.

I feel public opinion has been swayed by continual spin from this Government about tax cutting making it a no -go area at a time when the economy might benefit.