This is Joseph.
There is a idea in economics that giving money to the wealthy will result in faster rates of economic growth than giving money to the poor and middle class. To be fair, it is not completely daft to ask whether there is a specific way that taxes could be adjusted to simultaneously increase revenue and economic growth. While that seems ambitious for even a good policy, it is to be remembered that a bad policy might manage to hurt both revenue and growth at once.
You can easily see cases where targeting benefits at the wealthy might not work so well. The idle rich are unlikely to be active investors creating new capital. The rich have the options to invest elsewhere and might use their increased revenues to drive economic growth in other places. The recent British tax cuts seem to have created a lack of confidence, for example:Or:
- Cancellation of a planned rise in corporation tax to 25%, keeping it at 19%, the lowest rate in the G-20.
- A reversal in the recent 1.25% rise in National Insurance contributions — a tax on income.
- A reduction in the basic rate of income tax from 20 pence to 19 pence.
- Scrapping of the 45% tax paid on incomes over £150,000 ($166,770), taking the top rate to 40%.
- Significant cuts to stamp duty, a tax paid on home purchases.
- A network of “investment zones” around the U.K. where businesses will be offered tax cuts, liberalized planning rules and a reduction in regulatory obstacles.
- A claim-back scheme for sales taxes paid by tourists.
- Scrapping of an increase in tax rates on various alcohols.
- Scrapping of a cap on bankers’ bonuses.