(JustPatriots.com)- Just a few days after Prime Minister Liz Truss unveiled the initiative, the British government is abandoning a plan to reduce taxes for top incomes.
According to reports, the decision follows the newly sworn-in government’s attempt to boost economic activity and restore consumer confidence appearing to backfire. It sent the British pound to a historic low versus the US dollar. The plan put the Truss administration in an economic predicament.
In a tweet, Truss said that the tax break for the wealthy has turned into a distraction from her goal of bolstering the British economy in the face of rising prices and concerns about a possible recession.
Truss explained that the focus is on establishing a high-growth economy that finances world-class public services, raises salaries, and generates opportunities across the country.
Reports show that after the plot was revealed, the pound fell to a record-low $1.03 versus the dollar. The greatest tax cuts in fifty years, costing about $50 billion, would be paid by borrowing, according to Chancellor of the Exchequer Kwasi Kwarteng.
The 45% rate for people making more than $164,000 a year would have been erased under the tax cut for the highest bracket.
Some members of Truss’s party opposed the initiative.
Former Cabinet minister and prominent Tory Michael Gove criticized the highest tax rate reduction as a show of the wrong principles and claimed that borrowing to pay for the reductions is not Conservative.
The Bank of England declared last week that it would purchase long-dated British government bonds of whatever size is necessary to restore normal market conditions after investors responded strongly to the Truss budget.
Reports show that price increases clocking in at around 10% for the year ending in August, the United Kingdom is experiencing some of the worst inflation in the world. Some people viewed the Truss government’s decision to increase the amount of money available to consumers as conflicting with central banks’ efforts to reduce inflation by reducing demand.
Here’s an idea: Stop spending money and stop expanding government programs.
