Report calls for targeted tax cuts to kick-start economy
13 Oct 2011
Tax cuts targeted at business and Britain's top earners would help to kick-start the UK’s ailing economy, according to a new report.
The Centre for Policy Studies (CPS) claims that the best approach to boosting growth is to improve the UK’s competitiveness by lowering specific taxes and undertaking regulatory reform.
Specifically, the think-tank has called on the Chancellor to scrap the 50p top rate of income tax, coupled with a reduction in employer national insurance contributions and additional cuts to the main rate of corporation tax.
The report, penned by the CPS's Ryan Bourne, also proposes introducing a £500 increase in the personal allowance.
It added that targeted tax cuts could be funded by beginning to reform the pensions system and cutting the international aid budget.
'In the longer term, it is in the UK's interests to provide as much incentive as possible for both the wealthy and entrepreneurial classes to reside in the UK,' said Bourne.
'Alongside the cuts in corporation tax and employers' NICs, abolishing the 50p rate will show that the UK is open to wealth and success.'
Meanwhile, the director of the CPS, Tim Knox, warned that action was needed now to give the Chancellor the best possible chance of meeting his deficit reduction plan.
'Today's low growth rates threaten the Coalition's ambitions to eliminate the deficit,' he said. 'Fast action is needed now. Cutting tax on enterprise will give the best boost to the economy'.