Rishi and the Guardian keep saying Liz’s tax cuts will “cost” billions. Just a regular reminder that the money belongs to taxpayers; a tax cut does not cost taxpayers, it saves them paying taxes that they can instead spend in the real economy. The mindset that thinks taxes are a “cost” is a mindset that puts the state before the individual. Language is a tell about attitudes – socialists always think in terms of tax cuts costing the state revenue.
Helpfully, the Guardian and their experts have broken down the £50 billion figure in their headline:
So to translate into how this works on your payslip breakdown: taxpayers will save £13 billion from scrapping NICS, £6.7 billion will be saved by married couples by making the marriage tax allowance fully transferable – supporting families and in doing so strengthening society. £11 billion will be saved by removing green levies off your energy bills and £19 billion will be saved by businesses to be reinvested or more likely to pay increased wages in the inflationary environment we are now in. The only true cost to taxpayers is therefore the £10 billion on strengthening defence.
The net saving to taxpayers pocketed, based on the Guardian’s figures, is £30 billion. Much of which will unfortunately go towards paying their increased energy bills. So Liz Truss’s tax savings are the best way to ameliorate energy price rises without getting into price controls which distort price signals. Price signals that incentivise people to change their energy usage and insulate their homes…