[Chrysalis]

Ignitition I will try and give you a real world analysis of how I see things.

If I see an extra £10 a month in my wages from a tax cut, its unlikely to change my spending habits, and its unlikely to make me feel confident about the economy. Obviously high end wage earners would see a bigger difference in tax cuts but they would simply save it instead of spend it, in that respect it is not taking money out of the economy it is enforcing it in circulation (which you agreed with earlier). Someone stashing money in a bank account is not keeping it in the economy, especially when its off shore.

So lets take someone on 17k a year with say a 10k tax allowance, so taxed 20% on the 7k. £1400 tax a year, paid weekly so £26.92 tax a week on income tax before tax credits. a tax cut of 1% on income tax would drop it to £25.57 tax.

Now give me a honest answer please.

Which is going to make someone feel more confident in the economy so they more willingly spend.

A tax saving of £1.35 a week or the government maintaining spending in public services. As such avoiding announcements about half a million job losses, cuts everywhere, and local firms going bust due to loss of contracts.

The only logical reason I can come to that you pushing for 'more' tax cuts is you on a decent salary and you personally would gain a modest amount. Taxation generally forces money to circulate, it is not the opposite way round. As I said before the fact people moan about paying taxes is proof that they would not willingly spend the money otherwise. A contracting economy in the long run would probably make you lose more because whatever wage increases you would like would become less likely if your company is struggling.

Countries that have higher standards of living generally have higher income taxes as well. The long term reason we are struggling more than france and germany, is we simply stop producing goods, which of course damages exports and GDP, the bottom line of a economy, a service economy is purely based on national confidence. The damage on that side of things was started by thatcher, however I dont put all the blame on her, blair and brown could have reversed her policies but chose not to.

Also I am not dead set against cuts, but any cuts should be done reasonably eg. 1-2% a year, not draconian 80billion annual cuts. These cuts dont feel thought through, they seem to be done to appease a certian part of the population. We are entering a double dip and negative growth is almost a garuantuee for the next quarter. The bright side is if you lose your job you will be paying less taxes.