1. Covid has shown us that we need a bigger, better, state. 2. Taxes will eventually have to rise to pay for that.
3. Many other economies with high GDP/head function well with higher taxes, larger states, so 'high tax damages business', is, to a point, a canard.
But...
3. Many other economies with high GDP/head function well with higher taxes, larger states, so 'high tax damages business', is, to a point, a canard.
But...
4. Macro stabilisation priorities mean that it is too soon to be thinking of raising taxes yet.
5. Not the case here, but often on the right the 'high tax will damage business' is just cover for 'small state means the rich keep more for themselves'.
To those replying ‘but Taiwan, Korea!’ Yes, we want their pandemic response, but we don’t want to shrink other state services. Some may do, but this is a minority position. And it would not generate compensating wealth if we did it.
6. On top of this, we - and here this is politics not economics, of course - need a fairer state. Covid19 was a hugely regressive shock. It was made more regressive by unfair housing policies, poor social care, inadequately resourced NHS and schools.
