Few people outside the Treasury think that now is a good time even to be talking about raising taxes, let alone actually doing so. Nonetheless, it seems almost certain that the Chancellor will start down this road in Wednesday’s Budget. This may not be as mad as it sounds.
The arguments against immediate tax hikes are well known. The UK economy is still in the midst of the worst recession in over three hundred years. The cost of borrowing is still remarkably low. Raising taxes prematurely could simply undermine the recovery and actually make it harder to bring the public finances back under control.
It would also be politically risky. Almost all independent commentators – as well as many on the Conservative backbenches – agree that fiscal policy should continue to focus on supporting growth. The financial markets are comfortable with this too. This is an open goal that Labour…
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Utopia, you are standing in it! 
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