Author Archives: GovWorldMag

The UK Treasury needs to wake up to the power of those US tax cuts

I read in the papers that the Treasury is busy scrambling around to find more taxes they can put up. If they stopped giving away so much of our money to the EU and   stopped trying to find ways to carry on giving away our money to the EU  they would not need to worry about where to find the cash. If they fully embraced the idea that lower tax rates often lead to higher revenues we could make more economic progress.

This week the Republicans at last rose to the challenge of tax cutting. They announced a blockbuster package. If it or something like it passes it will increase US growth materially, it will  be a boost to the whole world economy, and it will suck business into the USA from higher tax regimes elsewhere.

The  Bill includes slashing the Corporation tax rate from 35% to 20%, and to just 12% as a one off to get large US corporations to repatriate profits they have been holding offshore to avoid high rates. It gives a big boost to the average earner by cutting bands of Income tax from 7 to 4, and lowering the tax take on all but the richest. It is costed as providing a $1.5 trillion stimulus over ten years. In practice I suspect the proposals will collect rather more revenue than the conventional official models predict, but it will certainly be stimulatory in its impact.

We do not need at the same time a budget in the UK looking for new ways to tax small business with extra VAT or National Insurance. We can live without a tax attack on the self employed. We do not need further tax attacks on homeowners. We need to match the US approach and show some enthusiasm for lower tax rates. We need a more dynamic economy, collecting more revenue, which comes from fewer, simpler and lower tax rates.

So much of the UK economic establishment is dominated by endlessly repeating the arguments of the Brexit referendum for no good reason.  Instead they need to talk about tax cuts and tax reform, appropriate deficit levels and Central Bank policy. There is a danger the UK will be left behind by the boldness of the US approach. If they carry this package or something like it it will have an electrifying effect on the US economy.

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John Redwood MP •

China’s top legislature closes bi-monthly session

The Standing Committee of the National People’s Congress (NPC) closed its bi-monthly session Saturday, adopting a new law on public libraries, revisions to several laws, and decisions on reforms.

Zhang Dejiang, chairman of the NPC Standing Committee, presided over the closing meeting, as well as a meeting attended by the chairman and vice chairpersons beforehand.

Zhang urged members of the NPC Standing Committee to study and implement the spirit of the 19th Communist Party of China (CPC) National Congress and push forward relevant legislation work.

“The NPC Standing Committee will firmly support the centralized and unified leadership of the CPC Central Committee with Xi Jinping at the core and completely implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,” he said.

New Library Law to promote reading

The new law aims to promote the development of public libraries and help boost reading among ordinary Chinese.

The law asks the governments to increase input in public libraries, listing it in their budget and development plans.

Libraries are pushed to apply modern technology including digitalizing content and improving online services, better protecting ancient books and promoting traditional culture.

Libraries will be punished if hosting or allowing others to host activities undermining state security and the public interest. Those directly responsible for the offences will face penalties.

Law revision for updated, clearer standards

The top legislature adopted a revision to the standardization law, 28 years after it took effect.

The revised law clarifies what standards are compulsory and what are recommendations, expands the scope of standards from industrial products, construction and environmental protection to much broader sectors, including agriculture, industry, services and social programs.

Technical standards concerning health and life and property safety, as well as national and ecological security are prioritized.

The government is required to better exercise their duty of coordinating different standards to avoid overlapping and duplication and supervising implementation of standards.

Lawmakers also adopted the revision to the law against unfair competition, an amendment to the country’s criminal law to punish acts of gravely disrespecting the national anthem, as well as minor amendments to several clauses of 11 laws that facilitate cutting red tape.

Decisions on reforms

The top legislature passed a decision to extend a pilot program of reforming land use rules in selected areas for one year, from Dec 31, 2017 to Dec 31, 2018.

Approved in February 2015, the pilot program involves reforms to the way rural land is expropriated, easing restrictions on rural construction land trading, and reforming the administration of rural residential plots.

It also adopted a decision to expand across the country a pilot project to reform the supervision system, launched in Beijing, and Shanxi and Zhejiang provinces in January.

Other decisions adopted include temporarily adjusting application of laws and regulations during armed police reform, and applying the new National Anthem Law in Hong Kong and Macao special administrative regions.

 

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East Asia