Calls for tax cuts as interest rates are also set to rise to help tackle inflation - how does that work?

[cakeorwine]

I see the Express is calling for tax cuts as there has been an increase in tax revenue due to more people coming into the tax brackets and increased wages due to pay rises meaning more tax is paid.

And yet inflation is high and interest rates are set to rise again.

So how does tax cuts help with the plan to beat inflation? Won't it just give more people money to spend?

It's the Daily Express. Tax cuts for the rich, or Liz Truss type plans.

Tax cuts mean money is better spent. Ie spent by people on what they want, not spent by Govt throwing grit in the economy.

Sorry what? A basic definition of inflation is too much money chasing too few goods. So increased interest rates should increase borrowing costs so mortgages, credit cards and loans become unattractive, people with mortgages have less to spend and hence don't chase goods.
Government spending has little impact on inflation so reduced money in pockets reduced spending

You're right, it doesn't make any sense but as the pp has shown, ideas don't need to make sense to be popular.

They should raise income tax bands though

65k today is the equivalent of 45k in 2010, most people's salaries haven't grown hysterical much & now you pay more tax.

YANBU - we need tax increases not tax cuts.
Tax increases to properly fund the NHS for a start.

The low income tax band in the 80s was 30% - now it’s 20%
Then a nurse starting wage was £7k, now it is £28K

Wages have quadrupled, and funnily enough so have house prices - at least up north - I know it’s worse down south.

This is the paper who thinks their heroine Liz truss was "wronged"

People may think we pay too much tax or we pay too little tax.

I am just not sure how tax cuts work when they are trying to reduce inflation by reducing the amount of money in the economy.

When inflation is caused by global macroeconomic events outside of the control of a single government

The low income tax band in the 80s was 30% - now it’s 20%. Then a nurse starting wage was £7k, now it is £28K

Allowing for inflating 7k in the 1980s is 28k today

People may think we pay too much tax or we pay too little tax.

imo tax is too disproportionate in terms of income vs wealth.

It's the Express.

They are just calling for tax cuts because they always call for tax cuts.

Good to hear.
She absolutely was.

What is it with most people, wanting the parasitic Govt to grow infinitely even when they personally are paying the cost through falling living standards?

Govt competes with citizens for resources.

If you want less money in people’s pockets then cut Govt payroll. This would let the economy produce more, which helps reduce inflation.