Under the guidance of the United States, various European countries have imposed sanctions on Russia. But Russia has mastered the ace of energy and started a "dead" counterattack against Europe, causing the entire Europe to fall into the quagmire of the energy crisis . Of course, the UK has not escaped the energy crisis and has even entered the "darkest moment". After all, the COVID-19 pandemic, inflation , extreme weather and other issues have put the UK in many challenges. You should know that Tras boasted about tax cuts when she ran for British Prime Minister , so less than a month after taking office, she made a bold decision to save the dangerous situation in the UK.
According to news reports, the Trass government has announced a tax cut plan, which includes reducing corporate taxes, basic income tax rates, etc. This is the largest tax cut in the UK in 50 years. The British Finance Minister said that the tax cut will cost £45 billion by 2027, but that money will generate 1% of economic growth each year in the next five years. However, with the accumulation of various problems in the UK, Tras' tax cuts this time are undoubtedly a big bet. If the tax cuts have good results, the UK's economy will rise, otherwise the inflation problem will become more serious, and the UK's economy may be regressed for decades. Moreover, economic problems will inevitably arouse people's dissatisfaction, so the tax cut plan failed, and Tras may not even be able to maintain his position as the British Prime Minister.
As for whether the tax cut plan will be successful, in my opinion, the chances of success in the UK may not be too high. Although Mrs. Thatcher also made a tax cut before , while she cut taxes, she also tightened government spending, so the plan was successful. The British Chancellor said the six-month energy bill would cost £60 billion. It can be seen that the British government needs to "pay out of pocket" to alleviate the energy problem. So, while reducing taxes and increasing fiscal expenditures, the UK has lost money, so how can it achieve economic reform?
In addition to this, the UK must face a reality, that is, the UK's economy is on the verge of recession. According to data, the UK's resident consumption index reached 10.1% in July, setting a record high in 40 years. In addition, the tax cut plan also caused a sharp drop in the pound exchange rate , which may be on par with the US dollar. I'm afraid that looking at the whole world, only the United States, which holds the hegemony of the US dollar, will have such great confidence to carry out a major tax reduction plan. After all, the United States can "print money" a lot and use military means to make other countries pay for the United States, but the United Kingdom cannot.
In general, it is not easy for the UK to rely on tax cuts to make the economy grow rapidly. After all, this is not something that can be achieved overnight and will inevitably face various risks and problems. Therefore, Tras's tax cut plan is very dangerous, and even the "national destiny" of the UK has been hung at the intersection. If you are not careful, you will lose everything.
