UK Chancellor of the Exchequer Jeremy Hunt is facing criticism over his non-dom tax policy, which some economists argue is 'economic madness'. Hunt's policy involves the abolition and replacement of non-dom status, offering international investors four years of exemption from UK tax on their overseas earnings. However, critics argue that this offer is unlikely to attract investors to settle and run businesses in the UK, and may result in an exodus of non-doms, leading to a fall in UK revenues. Many non-doms are seen as contributors to the UK economy through their investments, job creation, and spending. Some economists argue that the current fiscal rules are preventing sensible tax policies aimed at boosting growth, which they see as vital for long-term sustainability. They suggest that tax cuts and a new tax regime for non-doms could stimulate growth, increase Treasury revenues, and reduce spending on benefits. However, they argue that Hunt's non-dom tax policy fails to address these concerns and may further hinder growth. Critics call for a return to sanity and realism in setting taxes, regulating business, stabilizing the economy, and restoring stability to public spending [bf6bd710].
In addition to the criticism of Hunt's non-dom tax policy, economists argue that the current fiscal rules in the UK are preventing the government from implementing sensible fiscal policies. They highlight two policies that they see as vital for the long-term well-being of the economy: countercyclical stabilization and keeping tax rates low to incentivize the entrepreneurial class. They argue that the fiscal rules are condemning the UK to a future with no growth, leading to a long-term fiscal crisis and a soaring debt-to-GDP ratio. They call for a reevaluation of the fiscal rules and a focus on tax policies that promote growth and stability [bf6bd710].