One of the central arguments of Rishi Sunak’s campaign to become the next Prime Minister is that it would be irresponsible to cut taxes further until inflation is under control. Of course, there are risks here, but my view is that they are worth taking.
For a start, it is not clear that tax cuts have to be inflationary. Indeed, a recent paper from the Bank for International Settlements concluded that the inflationary effect of fiscal stimulus depends crucially on how central banks respond.
Basic economics tells you that inflation is caused by too much money chasing too few goods and services. But tax cuts in themselves do not increase the stock of money in the economy. This is largely determined by monetary policy, not fiscal policy.
Tax cuts might add to inflation by increasing the velocity of circulation of money. But it is more likely that they will simply…
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Utopia, you are standing in it! 
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