Have your say: Is it right to cut tax for UK’s highest earners?
Chancellor Kwasi Kwarteng announced a tax cut for the UK's highest earners last week by abolishing the additional 45p tax rate. However, on the opening day of the Labour Party conference Sir Keir Starmer vowed to reinstate the tax and slammed the Government's version of trickle-down economics. So, which approach is right?
Conservative Party supporters have long called for a low-tax chancellor and now they finally have their wish with Kwasi Kwarteng. But with the British economy reeling from soaring energy costs and inflation, there are doubts over whether now is the right time to slash Government revenue.
Mr Kwarteng made the surprise announcement at the ‘mini budget’ last week and said that from April 2023 the additional rate of tax of 45 percent paid by those earning above £150,000 per year will be scrapped. Instead, a single higher rate of income tax of 40 per cent will be paid by everyone earning over £50,270 per annum.
Put simply, the richest will keep more of their money and the Chancellor is banking on this giving a boost to Britain's economy and encouraging growth.
However, Labour has wasted no time in opposing the cut, with leader Sir Keir Starmer calling it the wrong choice at the party’s conference in Liverpool.
Speaking to the BBC’s Laura Kuenssberg, he said: “I do not think that the choice to have tax cuts for those that are earning hundreds of thousands of pounds is the right choice when our economy is struggling the way it is, working people are struggling the way they are and our public services are on their knees. So it is the wrong choice.”
After years of emergency economic policy from the Government due to the pandemic, the old arguments of Tory and Labour taxation battles appear to be at the forefront of British politics once again.
So, are the Tories right to give the UK’s highest earners a tax cut?
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