The great tax debate in the UK
As we stand on the verge of another substantial bailout for the banking sector and another financial stimulus programme for the UK economy Gordon Brown must now be considering whether he should have reduced taxes initially as a way of stimulating the UK economy. The constant drip feed of billions upon billions of pounds into the UK economy as a whole and the banking sector in general has not had the initial impact which Gordon Brown had expected and the UK population had assumed. So should Gordon Brown have introduced tax cuts rather than substantial fiscal stimulus programs?
When the opposition parties in the UK suggested tax cuts Gordon Brown was very quick to cut them down and suggest that they did not know what they were doing. However, he could have afforded a substantial tax reduction for the UK population which would hopefully have left more money in their pockets to spend on the high street and the economy as a whole. The focus of billions upon billions of pounds into the banking sector would appear to have been wasted with no benefit whatsoever for the UK population or the UK business market.
However, Gordon Brown now appears to have passed that point of no return and he needs to continue drip feeding money into the economy in order to stand any chance of a short to medium-term recovery. While hindsight is a very useful tool is has to be said that nobody expected the recession of today to be as deep and long lasting as many are now forecasting.
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