An interesting plan from Canada is reported in today^s Financial Times. The Conservative government has pledged to pay off the federal debt in 15 years, and return to taxpayers every penny of the money saved on debt interest payments each year. In addition, the government has promised to steadily lower federal corporate taxes, meaning that Canada would have the lowest tax rates on new business investment among the major industrial countries ....No chance here, with the unConservatives wanting to go down the highly expensive path of tackling relative poverty, which means reducing inequality, which is a very high tax option.
Such a programme has worked well in Australia, which has completely paid of its national debt, cut personal and corporate taxes, increased government spending, decreased unemployment, and enjoyed strong economic growth - all at the same time.
Like many politicians' ideas, it can be made to sound fuzzy and attractive, as long as there are no numbers present.