RISHI SUNAK has pledged to cut the basic rate of tax from 20 to 16 per cent within seven years if he becomes Prime Minister in what he has called “one of the most far-reaching cuts to income tax that we’ve seen.”
 
He has said the plan will only be implemented if inflation decreases first.
 
The news follows plans set out by Liz Truss which outline £30 billion of tax cuts if she is put into office including scrapping the increase in corporation tax and reversing the government’s National Insurance tax increase. 

Campaigners opposed to the tax cuts announced by both candidates have said they are unachievable and play with fire when it comes to their impact on public services, the economy and inflation.
 
Tax Justice UK head of advocacy Tom Peters told the Morning Star: “I think it’s actually unachievable, what they’re proposing, as well as undesirable… Both candidates have proposed tens of billions of pounds now of tax cuts… which are effectively unfunded.
 
“Almost every economist agrees that cutting taxes is inflationary, it increases demand in the economy and that therefore drives up inflation more.”
 
Mr Peters said the corporation tax increase which had earlier been proposed and would be scrapped by Liz Truss was to some extent about corporations paying back the money they had been handed by taxpayers through the Treasury during the pandemic. 
 
The tax advisory firm Blick Rothenberg found in a study that Ms Truss’s tax cuts would take at least £40bn from the Treasury, fuel inflation, and increase government debt.

Progressive Economy Forum director James Meadway told the Morning Star: “Sunak’s desperate gamble on income tax cuts trashes his earlier claims to be the man who could supposedly ‘balance the books’.