Chris Giles in the Financial Times on the broader context for current UK election policy debates --
These are all important questions, but cannot be answered unless Britain decides the sort of country it wants to be. We are stuck in the middle without low US tax rates, without German public services and without even Italian productivity levels. Once, this compromise seemed to satisfy the public. That is no longer true. The public become angry with politicians who contemplate higher taxes, are furious that public services are under such pressure and become incandescent if anyone suggests productivity-enhancing reforms that involve building projects near their homes or foreigners improving the dynamism of the economy.
With a couple of twists, this is also Ireland -- a key twist being that the tax revenue from overseas multinationals somewhat softens the tradeoff between taxes and services.
These are all important questions, but cannot be answered unless Britain decides the sort of country it wants to be. We are stuck in the middle without low US tax rates, without German public services and without even Italian productivity levels. Once, this compromise seemed to satisfy the public. That is no longer true. The public become angry with politicians who contemplate higher taxes, are furious that public services are under such pressure and become incandescent if anyone suggests productivity-enhancing reforms that involve building projects near their homes or foreigners improving the dynamism of the economy.
With a couple of twists, this is also Ireland -- a key twist being that the tax revenue from overseas multinationals somewhat softens the tradeoff between taxes and services.
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