At first it sounds odd, doesn’t it? Counter intuitive. Perhaps because the message relentlessly drummed in by right wing newspapers, think tanks and well-paid academics has been “lower taxes means more growth”. Yes things like police forces and health systems are all very nice, but we have to keep them to a minimum, because the taxes to pay for them are a drag on economic activity…. blah blah blah. Ask any economics expert at the bar of the Dog and Duck and they will give you the spiel. “Common sense, innit, mate?”
But it is common sense to infer that the sun goes round the earth. It took some real thought and investigation to show otherwise. Likewise the existence of atoms, electricity……..we could go on. Now another thoughtful study has been done which shows taxes may actually be good for economic growth. For one thing they pay for roads and legal systems, always a good idea if you want a predictable economic environment. History backs this up: relentless cuts to the Royal Navy before the revolutionary war of 1776 led to defeat when they came. Tax cuts in England benefitted Americans and Frenchmen!
In this light we ask you to at least consider, with an open mind, this article by Paul Whiteley for The Conversation. It might just change the way you think.
#tax #gdp #economics