Tax damages economy

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Davis: Tax increases depress economic activityWriting in the Telegraph, Conservative MP David Davis voices concern over tax increases, saying Boris Johnson's decision to up the National Insurance rate has drawn criticism from some within the party, noting that no government in recent times has raised taxes and gone on to win an election. Mr Davis says it is ironic that the UK has “broken free of the Brussels yoke only to embrace Continental levels of taxation and public spending”. He insists: “Raising taxes beyond a certain point - and we have reached it - just does not work”, arguing that it depresses economic activity. Mr Davis lauds the policies of a previous Chancellor, Nigel Lawson, who cut tax rates and increased the tax take. Mr Lawson's philosophy, he says, was grounded in a belief that beyond a certain point, increasing taxes reduces revenue to the Treasury. “With higher taxes, people in general work less hard and for fewer hours. As for the well-off, they just hire more and better tax lawyers”, he suggests.

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