Low taxes work for the many and the few

LISTENING to the shrill carping of the Left, it would be easy to believe this week’s Budget was little more than a tax giveaway for the wealthiest in society.

The Resolution Foundation – run by an acolyte of former Labour leader Ed Miliband – was typical, claiming Philip Hammond’s package of measures ‘overwhelmingly benefited rich households’.

What the think-tank does not seem to grasp is that a low-tax state works for all – or to paraphrase Jeremy Corbyn, for the many AND the few.

The Chancellor was able to pledge £20billion a year for the NHS, £6.6billion for Universal Credit, boost the minimum wage and inject much-needed cash into defence, roads and schools. Where on earth do Leftwingers think that money comes from?

It’s not rocket science: the less the state saddles firms with punitive levies, the greater the profits, the more people they can employ – and the more revenue the Treasury receives. Since corporation tax was slashed the yield has soared – fuelling the jobs ‘miracle’ and seeing unemployment plunge to a 40-year low.

Conversely, high taxes often have the unintended consequence of lower returns.

Take George Osborne’s jaw-dropping rise in stamp duty on high-value homes.

Depressingly, the move has paralysed the housing market and receipts are set to fall by £4billion over five years – money which could have been used for public services.

Perhaps surprisingly, Shadow Chancellor John McDonnell admitted yesterday that he wouldn’t scrap Mr Hammond’s income tax threshold increases.

But the punishing personal and corporate tax rises and ruinous spending commitments the Labour Marxist does plan would still torpedo the British economy.

The tax burden is already at a 48-year high. If this Government truly wants to reward aspiration and fuel the economy, it should allow people to keep far more of their own money.