Will tax cuts save British jobs?

[rov1200]

http://news.bbc.co.uk/1/hi/uk_politics/7719017 .stm

Now that all 3 major parties are intent on tax cuts will this help the economy and save British jobs or is there a better method?

Will tax cuts just lead to more imports as before and not be targeted at British companies?

What section of the community should receive these tax cuts, the poor, the rich, or those middle group with failing mortgages?

If ration books were still in existance people would be forced to purchase goods specified by the government. In a similar vein if we wanted to help British companies in this recession then should coupons be issued to enable these firms to take advantage of the giveaway?

[kinell]

As usual it will be hand outs to the lazy and irresponsible.

Any tax cuts in fairness should be directed through personal allowances so that every tax payer gets a benefit.

It will probably be an increase in tax credits for those who decide to take on commitments they cant afford.

Same old , same old.

Still its the open palm politics that gives labour some chance in elections.

[Octavius]

The economic downturn calls for a boost in the income of those at the bottom of the pyramid. Lower income tax increases disposable income, therefore, it may encourage people to spend more but it also makes working more attractive. But it�s a bit �finger in the air� really as it depends on how and where the tax cuts are implemented and how the tax cuts are funded � by reduced Government expenditure elsewhere, e.g. government programmes, health, MOD, welfare etc.

For the short term it could work to benefit the economy, but long term the impact of those cut backs in government spending will affect public sector workers and contractors and their employees who rely on that type of work as their income. If disposable income goes up, the cost of living will naturally follow.

Perhaps their efforts would be better spent trying to reclaim the estimated �97 billion underpaid in tax each year by requiring billionaires living in the UK to pay the taxes that ordinary people already do, eliminate the tax perks enjoyed by private equity groups and hedge funds, then go after the �billions stashed in offshore tax havens, curb corporate stamp duty, transfer pricing games and much more.

If such money were recovered, it could be used to raise all tax-free allowances, reduce basic rates of income tax and increase pensions. But that would mean upsetting the rich and the corporate cats. It won�t happen.

[rov1200]

As you say if tax cuts are funded by reducing public expenditure this will add to the 3m about to be unemployed?

The problem is Gordon is intent on making this a multilateral thing with each country acting in parallel each spending as if there's a bottomless pit to draw on.

Nobody would object to the millionaires paying a bit more if they could be prevented playing one country off another. Even Louis Hamilton is using Switzerland as a base rather than paying British taxes.

I would prefer a large reduction in VAT for a short period to encourage people to buy rather than tax cuts which may only encourage people to save more. ie if sales of cars are sluggish reduce the tax on purchases...make it demand led on the items we need to sell and leave the other items alone. Its akin to giving special offers, ones that encourage us to buy.

[jake-the-peg]

Tax cuts will only have a limited effect on saving peoples jobs..

If you're a business without enough work for all your current staff you will not keep them on twidling their thumbs because you've been given tax cuts.

That is why the Government is bringing forward capital expenditure projects to try to fill some company order books today.

The Tory party oppose this because it is using future money that they had their eye on for other things

[VHG]

>by reduced Government expenditure elsewhere

Oh come on, the labour government will never do that.

It never occurs to them to try to REDUCE the money they are spending.

Gordons total time as chancellor was all about taxing peope any way he could (particularly new ways) and then throwing money at any and every government department.

They will never actually reduce what they spend, that is too much like hard work.

[rov1200]

Jake I agree that tax cuts will have limited success. But the capital projects cannot be turned on like a tap and there will be a large time lag before starting. Someone suggested a massive housing building program but with houses already lying empty it will only add to the problem.

I still believe the government will go for VAT reductions in order to stimulate the market. But as just 1p reduction in the VAT costs the economy about �7 billion in lost receipts the only way to make this workable is to just target certain industries and leave the others untouched.

[rov1200]

You can bet the government who has to pay the debts in the future won't be Gordons.