The problems the global economy is currently experiencing underline the need to reduce the intrusiveness of government and to lay the ground for entrepreneurs to blossom. Only in this way will we see a return to meaningful growth in output and in the number of jobs. Reducing taxes does not necessarily mean a reduction in the taxes received by the public purse: the highest income tax rate in force in the UK when Margaret Thatcher came to power was around 80%. She reduced this in stages to 40% and the amount of tax received by the treasury actually went up! Similarly, increasing the income tax rate from 40% to 50% is thought to have reduced the tax paid. Why? Because people who are taxed more seek out ways to avoid or minimise the amount they pay, resulting in lower tax revenue.

The income generated by my <a href=”http://personalisedchristeninggiftsshop.co.uk/”>personalised christening gifts</a> business is heavily taxed: 20% immediately goes to the government in the form of value added tax (VAT), then the profit I make by selling the personalised christening gifts is taxed again at the corporation tax rate of 28%. And the salary I pay myself is also taxed at 20%!

It would be interesting to work out whether the time I spend making the christening gifts is more or less than the time taken filling in the paperwork required by the government, together with time taken looking for ways to minimise the tax! Free up the entrepreneur from the shackles imposed by the government.