Skip to content
Sunday 16 August 2026London --:--Frankfurt --:--Zurich --:--
NewslettersSearchEN · DE
MorningWire

European business, markets and politics

FTSE 100
10,750.11
-0.21%
DAX
26,440.31
+0.53%
CAC 40
8,636.80
-0.16%
STOXX 50
6,539.59
-0.09%
  • Europe
  • Markets
  • Business
  • Economy
  • Technology
  • Politics
  • Opinion
More
GermanyFranceBankingAIEnergyFintechPropertyCapital Markets
  • Germany
  • France
  • Europe
  • Markets
  • Business
  • Economy
  • Technology
  • Politics
  • Opinion
  • DE
Wednesday 28 February 2024 6:00 am  |  Updated:  Wednesday 06 March 2024 7:36 am

Tax cuts don’t ‘cost’ a thing – it’s not the Treasury’s money to begin with

By: Andy Silvester

Add as a preferred source on Google
The Office for Budget Responsibility (OBR) has downgraded its growth forecasts for the UK economy over the next couple of years as higher interest rates bite.
higher interest rates bite.

Language matters. So the framing of our debate ahead of the budget – in which every tax cut is described as costing a billion here or a billion there – matters too.

Indeed the acceptance that a tax cut “costs” anything at all is an ill wind for those, like this paper, who think government is generally better smaller than larger.

What is tax? It is the handover of a part of one’s cash to fund the state, the functions and extent of which we battle over at the ballot box.

A tax ‘cut’ involves the government taking less of that cash, which is generated at source not by the Treasury but by the individual going to work, or buying a flight, or engaging in the many basic human behaviours that we are not obliged to pay a levy to enjoy. 

At a basic and very fundamental logical level, a tax cut doesn’t ‘cost’ anything at all: it is simply less cash for the Treasury to spend on what it wants. 

So the framing that the Chancellor doesn’t have the money to hand out a tax cut gets the equation back to front; if anything, the issue is that he is spending too much.

The framing du jour implies all the money in the land rightfully belongs to the Treasury – in truth, none of it does.

Such language means that we are only ever left with a ratchet up; a tax hike is said to “raise” money for the Treasury and by implication the country, a cut by implication costing instead.

So we are left with an ever larger, ever growing state. And that, inevitably, leads to a more stunted economy – and a distinctly less prosperous one.

Read more

‘Ever-widening gap’: Wetherspoon boss Tim Martin urges Burnham to cut more pub taxes

Founder and Chairman of JD Wetherspoon, Tim Martin

Share this article

  • Facebook
  • X
  • LinkedIn
  • WhatsApp
  • Email

Similarly tagged content:

Sections

  • Opinion

Categories

  • Banking
  • Opinion

Trending Articles

  • Grandparents fund university degrees to avoid inheritance tax net

  • Revolut chatbot goes rogue by charging users to cancel subscription

  • Brompton Bicycle sues former adviser for ‘professional negligence’

  • Revolut takes flight with launch of new airport lounges

  • Is the Zeekr 9X Super Hybrid the new luxury SUV to beat?

More from Morning Wire

  • ‘Ever-widening gap’: Wetherspoon boss Tim Martin urges Burnham to cut more pub taxes

    Hospitality
    Founder and Chairman of JD Wetherspoon, Tim Martin
  • Andy Burnham should start by scrapping the £100k tax trap

    Opinion
    Burnham cityscape showcasing modern architecture, bustling streets, and vibrant community life in a thriving urban setting
  • Burnham to cut pub business rates by 20 per cent

    Hospitality
    Andy Burnham, Mayor of Greater Manchester, smiling in glasses, dark jacket, light blue shirt, blurred green background.
  • Nearly 1m people to pay higher tax ‘by stealth’

    Economics
    Tax Trap: Another 74,000 taxpayers were added to the punitive £100,000-£125,000 income bracket during the 2024/25 tax year
  • Housebuilder Bellway calls for ‘immediate’ cut to stamp duty

    Property
    Barratt Redrow said it remained "confident" in its medium-term target of 22,000 homes a year.
  • Unfunded Digital ID will not free up new cash for Burnham’s cost of living plans

    Politics
    Burnham cityscape at sunset with historic buildings and bustling streets, highlighting the vibrant urban landscape
  • Tom Kerridge: No good restaurant has ever been run by accountants

    Hospitality
    Celebrity chef Tom Kerridge smiling during a cooking demonstration, wearing a chefs uniform in a professional kitchen setting
  • ‘Dwarfed by other costs’ – Why cutting business rates for pubs won’t save the sector

    Hospitality
    Andy Burnham, Mayor of Greater Manchester, in a dark suit and glasses, listening intently at a wooden table.
MorningWire

Independent European business, markets and political news for decision-makers.

Morning Briefing

Europe

  • Germany
  • France
  • Europe
  • UK & Ireland

Business

  • Markets
  • Banking
  • Technology
  • Energy
  • Property
  • Fintech

Editorial

  • Opinion
  • Editorial Policy
  • Corrections
  • Contact

Company

  • About Morning Wire
  • Privacy Policy
  • Terms of Use
  • Cookie Policy
© 2026 Morning Wire Ltd · Published by Morning Wire Media, Bahnhofstrasse 65, 8001 Zürich, Switzerland
Privacy · Terms · Cookies · Facebook