A tax raising Budget is expected early in the new Parliament as a first step on the path towards eliminating the UK's budget deficit. However could such tax increases kill the goose that lays the golden egg? I believe that increasing tax revenues through higher tax rates is likely to be difficult to achieve whoever is Chancellor of the Exchequer over the next few years. My justification for this opinion is Arthur Laffer and my A Level history studies.
First more about the goose. One of the most famous quotes on taxation dates from the 17th century and is attributed to Colbert who was chief minister to Louis XIV. He said 'The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing'. The principle that taxation can only be raised so far was...
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