Fiscal flexibility

Article Abstract:

Politicians control fiscal policy, unlike monetary policy, which tends to be controlled by central banks. Politicians tend to have short-term perspectives, and tax changes have long-term effects, so there is a case for changing the way that fiscal policy is controlled. Tax changes tend to be too slow to be of much use in managing the economy, and there is a case for allowing fiscal policy to be more effective and ease the pressure off monetary policy. An independent body could be allowed to make small changes with no need for approval from parliament, a proposal from the Business Council of Australia.

Economic aspects, Political aspects, Fiscal policy

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A dubious enterprise

Article Abstract:

United Kingdom incentives for entrepreneurs are affected by tax regimes, though start-up companies have problems in obtaining funds, and large companies tend to attract most investment. The government may not have addressed the tax concerns most relevant to entrepreneurs. The tax schemes to aid business are complex, creating work for lawyers and accountants. There is a debate as to how far tax incentives for stock options are useful, and on the costs involved of the schemes.

Industrial policy

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Hypothetical

Article Abstract:

The United Kingdom Treasury has opposed hypothecation of tax, but appears to have withdrawn from this position. Hypothecation involves setting aside taxes to be used for particular purposes. Opponents of this practice argue that governments are hampered from deciding on spending priorities, and public spending controls are undermined. Some observers see the change of view as linked to political opportunism, and hypothecation has been seen as a way of raising taxes.

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