Vibes matter with tax, so here’s how Healey can deliver a feel-good Budget
We may think it is easy to try to predict how a major tax announcement may impact sentiment based on whether it’s a give or a take. but the evidence shows, there’s no clear correlation between tax cuts and positive reaction, or tax rises and negativity, says Tim Sarson I’ve just come back from a [...]
The new Chancellor, John Healey, is set to deliver a Budget on October that aims to strike a balance between financial stability and public sentiment. The challenge for Healey lies in predicting how major tax announcements will affect public mood, as there is no clear correlation between tax cuts and positive reactions, or tax rises and negativity.
Despite this, Healey can still make a significant impact on the nation's finances and behavior by carefully selecting tax measures that are popular, generate revenue, and have positive long-term economic effects.
To achieve this, Healey's Budget should include a mix of cheap, popular measures that simplify the tax system, as well as necessary reforms and overhauls of the tax system that are kept quiet and properly consulted on beforehand. Additionally, if the budget is in a position to do so, Healey could generate additional revenue through tax-raising policies that won't cause backlash and have minimal economic consequences down the line.
Overall, Healey's Budget can be a "feel-good" event, as long as the right vibes are created and the correct measures are implemented.
Written by urgent.news from City AM's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
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