Treasury urged to test tax cut theory

A group of economists have said the Treasury should follow the example of the
US, where a unit has been set up to research the impact of reducing taxes on the
wider economy.

The Taxpayers’ Alliance has written to Gordon Brown asking him to look into
the idea. The pressure group said lowering taxes could generate growth,
encourage entrepreneurs reduce evasion and avoidance.

The group used the example of Ireland, where a tax cut had brought in higher
revenues by stimulating growth.

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