The disaster of former British Prime Minister Liz Truss’ “low taxes, high growth” framework proves that there is no clear relationship between income tax rates and economic growth. Wealthier economies tend to be relatively highly taxed because they pay for expansive welfare programmes. The successful Asian economies without comparable safety nets tend to have smaller governments and lower levels of deficits in relation to GDP than other economies. All of this suggests that the size of government rather than the peak tax rate is more material for economic growth.
T N Ninan examines what this means for the trajectory of Indian economic policy. Read it here
In other views: Aditi Phadnis says for a party that has barely five months left to face an election the BJP appears remarkably confident about its plans for Karnataka. Read it here
Sandeep Goyal discusses the dispute over an advertisement between ad agency Mullen Lowe Lintas and client Motilal Oswal Financial and what it means for the advertising industry. Read it here
