Tax and Fiscal Policy

Higher Spending Means Higher Taxes

Julian Jessop quoted in The i

IEA Economics Fellow Julian Jessop has been quoted in The i arguing that any future spending increases will need to be paid for by tax increases. This comes amid rumours that the government will reform ‘non-dom’ tax status, a key plank of Labour’s spending proposals, in the upcoming Budget.

Julian said:

“If [the Chancellor] uses up all the fiscal headroom now for tax cuts, then obviously that creates a bigger problem for Labour, because the public spending was already tight,”

“They will undoubtedly want to spend more, and so the only way to do that is by reversing some of those tax cuts and finding other taxes to increase.”

Read the full article here.