Ian King, business presenter:

It depends what you mean by trickle-down economics. 

We certainly saw what you might describe as trickle-down economics from Ronald Reagan in the 1980s. While it increased inequality in the US, it also gave the States back its self confidence after 20 years of decline and set it on a road to higher growth, as well – arguably – as bringing an end to the Cold War. A lot of the most valuable companies in America today, such as Microsoft, Apple and Oracle, were either born in that period or saw lift-off during that period – and the success of those businesses benefited everyone.

A lot of people will criticise in particular the abolition of the 45p additional rate of tax. But don’t forget that Nigel Lawson cut the top rate of income tax from 60p to 40p in 1988 and the proportion of tax paid by the highest earners actually lose as a result. 

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The same thing happened when George Osborne cut the additional rate of tax from 50p to 45p, and it turned out to raise extra taxes for the Treasury ultimately. If that happens again as a result of Mr Kwarteng’s measures today, then the less well-off will ultimately benefit, although it is hard to say by when.


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