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Published byShanon Poole Modified over 8 years ago
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The tax freeze Kristian Jensen Minister for taxation
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The tax freeze Comprehensive and clearly defined No taxes or excise duties can be raised Only a few, well-defined exceptions – and the taxpayers get their money back by matching tax cuts
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What they predicted: Run out of money Growing popular dissatisfaction
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What happened? Record budget surpluses Single most popular policy, supported by all major parties
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Why so successful? Strong economy, not tax hikes, is the key to sound government finances The tax freeze as a credible commitment
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The tax freeze the benefits clearly outweigh the costs the cost is having not to raise taxes
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A plan for further tax cuts: The two constraints Fiscal sustainability Avoid “overheating”
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The constraints Business cycle considerations not necessarily the most binding constraint: Tax cuts reduce excess demand, if capacity effect exceeds demand effect Fiscal sustainability requirement: kr 1 per kr 1 tax cut Business cycle requirement: øre 50 per kr 1 tax cut
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Tax cuts its about freedom of choice
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Economic freedom it is not only about taxes
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