British government plans tax-cutting to revive economyNovember 24th, 2008 - 10:22 pm ICT by IANS
London, Nov 24 (DPA) British Prime Minister Gordon Brown Monday defended his policy of tax cuts to stimulate the economy in an effort to soften the impact of a looming recession.Speaking before a major tax-cutting budget due to be announced in parliament, Brown said history had shown that failure to act early had only prolonged periods of recession in the past.
“Letting the recession run its course is not an option,” said Brown at a conference of the Confederation of British Industry (CBI) Monday.
Later Monday, Chancellor of the Exchequer Alistair Darling was due to outline radical tax-cutting plans under which value-added tax (VAT) on consumer goods could be slashed by 2.5 percent to 15 percent for a limited period.
It was reported Monday that the Labour government, in a major U-turn, would also propose to increase the tax rate for high-income earners to help compensate for soaring government borrowing.
Monday’s pre-budget report is expected to plan for a 45-percent top rate on people earning in excess of 150,000 pounds ($223,000) to be introduced after the next general election.
The fiscal boost, expected to total about 15 billion pounds, could force government borrowing up about 120 billion pounds next year, expert forecasts have said.
The opposition Conservatives have described the plans as a “tax bombshell” for the future.