Quote:
Originally Posted by Chrysalis
ignition whats wrong with increasing income tax to fix the defecit? instead of consumption taxation and public cuts.
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It won't work. Punish the productive section of the economy you reduce the incentive to produce and reduce overall tax take.
http://en.wikipedia.org/wiki/Laffer_curve
To close the deficit without cuts would require an... unpleasant increase in income tax. I am not convinced that taxing people for working is the best way to power the economy, it's a great way to get more people on welfare though as working, across many different income levels, becomes less viable.
What's wrong with taking the state back to historical trend levels Chrysalis? Will the country fall into disarray if we go back to only spending 40% of our entire national wealth on services? Were we in some post-apocalyptic wasteland back in 2005-2006 when this was the spend?