There’s a lot of talk today about how we can improve (kick start) the economy. There is a lot of speculation about reducing the 50p highest tax bracket. All that is not going to kickstart the economy.
If rich people have more money in their bank they are not as likely to spend more money as the lower income families.
They can already afford everything they want so they are not likely to buy more and, therefore, it will make hardly any difference to the overall economy.
Reducing the amount of tax and the cost of living at the lower end of incomes will make a difference.
Enabling lower income families to have more money in their bank, to have a little bit extra cash in their pocket, will help the economy because, at the lower income levels, people want things they can’t currently afford. They have needs that are unfulfilled because they can’t afford the luxuries in life that people in the 50% bad tax bracket can afford.
And how can we enable lower income households have a few extra pounds? Easy:
Stop letting the domestic utility companies get away with hiking prices up while they are raking in billions in profits. Stop the fuel companies from increasing their prices while also making billions in profits.
There are so many pen pushers ‘talking’ about prices (price fixing and monopolies) but nobody is actually doing anything about it.
So instead of thinking of ways of making the rich get richer, think of ways of making the poor more comfortable and think of ways of giving the poorer section of our society a little bit of surplus cash that they will, inevitably, go out and spend on the high street.
Making the rich richer does not put more money into the retail sector. Making the poor little bit more flush will put more money into the high street.
The economists do not think about the poorer sector of society because they live in an unreal world of huge salaries and high value properties and they can afford a three week holiday several times a year. They don’t struggle to fill up their car or pay their electricity bills and gas bills.
It seems to me that the economists, the bankers, and the political cronies who sit around working out economic structure haven’t got a bloody clue about the real world or about how spending will only occur if you put more money in the pockets of the people who need it most – not the people who need it least.
Giving somebody with a £200,000 salary an extra few quid is not going to tempt them to go and buy a new pair of shoes. It’s not going to prompt them to go and buy new TV because they already have all of the things they want, all things they need plus surplus luxuries beyond that.
Compare that to a family at the lower end of the income bracket and, people who struggle by on £20,000 a year…
Stuff an extra £20 in the back pockets of lower income families and they will, almost definitely, spend that £20 immediately either on bill payments or on the high street – on things they can’t afford. It certainly won’t be stashed under the mattress or in a high interest bank account!
People who live week to week, pay cheque to pay cheque would, if only they could
buy a new pair of shoes for their children (money on the high street).
visit a restaurant (money on the high street).
save up for a new TV that they currently wouldn’t even dream about (money on the high street).
perhaps buy some new furniture that they currently won’t even contemplate ever having (money on the high street).
Rich folk already do all these things without even thinking about it…
Fixing the economy is not going to happen by giving the wrong sector more money.
It will ONLY get a positive boost if the right people have a few extra quid in their pockets.
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