Who will pay for the next rescue package if required?
As more and more governments around the world continue to realise that interest rate reductions alone will not refloat the worldwide economy, there are concerns about who will actually pay for these ever increasing rescue packages. The US has already doubled its rescue package of late and the UK government appears to be floating new and innovative ideas, to be funded from debt, on a monthly basis.
While the UK government in particular could not be accused of sitting on its hands and watching the UK fall into recession, there are concerns over who will actually pay for the massive figures being mentioned. Worryingly, it looks as though we got an inclination as to how the future budget would be balanced with the announcement of the 45% tax band after the next General Election and many experts are forecasting more hard-hitting moves to catch the higher income earners in the UK.
However, it is unlikely that the real highfliers of the UK will sit back and see their incomes taxed ever higher in order to make up the shortfall on the UK government's budget. Historically the UK economy has offered a useful platform for entrepreneurs to prosper but with tax rates set to rise, some of the benefits of investing in the UK are set to disappear.
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