In this recent post, I argued that Ed Balls’ policy of reversing the Conservatives’ 5p cut in the top rate of tax was pointless. My argument was principally an economic one. Balls had stated that the tax increase would be used to reduce the deficit, but research from both HMRC and the IFS suggests that such a small increase might make little or no difference to tax revenues. Significant deficit reduction cannot possibly come from minor adjustments to tax codes. What is needed is growth.
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