Capitalism should take centre stage on road to 2015 election
During David Cameron’s speech at the G20 summit in Brisbane over the weekend, he warned of “a dangerous backdrop of instability and uncertainty” over the global economy, which could present a very real risk to UK economic recovery.
The British Prime Minister discussed the threat of stagnation within the eurozone, where high debt and low economic growth are at the core of pecuniary trepidation.In contrast to the relatively bleak eurozone economic concerns, the UK has the fastest-growing economy in Europe, having risen by 0.7 per cent in the third quarter of this year; unemployment levels continue to fall and home grown companies are investing more. The Tories’ tax-cutting policies and pro-business approach (including the lowest corporation tax out of the G7 countries) certainly appear to be working on Britain’s road to economic recovery.
As such, if lower taxes and a more positive attitude towards business is a success, then focusing on a capitalist society must be the way forward.
The fact is wealthier individuals contribute more in tax revenue, with the top 3,000 richest people in Britain paying more than the nine million lowest-paid taxpayers put together. Consequently, encouraging people to strive for success in order for them to become more affluent by cutting tax rates further would act as a great incentive that would benefit everyone.
The country’s top achievers would then feel that their hard work and achievement is being less punished by the government in the form of higher taxation. If the richest individuals in society continue to be ‘soaked’ by high taxes, they would be more likely to leave the UK in order to fulfil their financial ambitions, as many previous deVere surveys have concluded.
It’s no secret that targeting the rich has long been a favourite amongst left-leaning politicians, and Ed Balls’ plans announced at the beginning of the year claiming that a Labour government would increase the top tax rate to 50p, would have an adverse effect on the UK economy.
Over a period of time the 50p tax rate would in effect lower taxable income, meaning HMRC will receive a larger proportion of a smaller pie, leading to less money for the exchequer and increasing the tax burden on the lower-income earners.
The opposition’s defacto ‘war on wealth’ would only serve to make Britain less attractive to foreign investors and subsequently reduce economic growth. In my view the only way to sustain growth is to continue cutting taxes and wholeheartedly encourage the country’s highest earners, largest employers and chief investors.
As the 2015 general election looms closer, I believe that all political parties should concentrate on a capitalism-fuelled, resilient economy which will lead to further growth and expansion, higher GDP and increased overall wealth, and avoid the polarisation of society. This is the only way to protract the progression of Britain’s economy.