We are often reminded that death and taxes are two of life’s constants. Sadly, I have had reason to contemplate the first in the last couple of weeks and I am reminded (at the risk of being trite) that we really do owe it to ourselves and each other to live our best possible lives as we simply do not know what is coming around the corner.
Of course, we are getting much better at keeping death at bay with advances in designed-in safety and healthcare, the latter of which is costing us all an ever-increasing slice of the national income. Which leads on to taxes. I asked Bing’s AI – “Why the UK tax burden has increased since 1990” and its response was, of course, textbook:
Some possible reasons why UK taxes as a percentage of GDP are higher than in 1990 are:
I then asked Bing a highly biased question (reflecting my low-tax view point!). “Why do high-tax economies grow slower than low tax economies”. Its answer:
The relationship between tax rates and economic growth is not clear-cut, as different studies may use different methods, data, and assumptions to measure the effects of taxes on growth.
So, whilst Liz and Kwasi may have totally messed up the delivery, the message of tax reduction and simplification seems to me to be mission critical. To drive GDP growth we somehow need to square the circle of record government expenditure (much of it on people who may well be more usefully deployed elsewhere in the economy) with lowering taxes to stimulate growth, all whilst improving delivery of public services.
AI and new technology could well be our saviour here, in the same way the steam engine was after the plague as it enables seismic changes in efficiency. This will of course be very uncomfortable for millions of employees, but in the long run should result in improving the lot of the average British subject.