Britain’s new Prime Minister Liz Truss was Wednesday to outline an economic rescue programme focussed on tax cuts — even as US President Joe Biden rejected that approach as the two prepared to meet at the UN
“I am sick and tired of trickle-down economics. It has never worked,” Biden tweeted ahead of his first meeting with Boris Johnson’s successor in New York.
“We’re building an economy from the bottom up and middle out,” the president said, contrasting his approach to Republican opponents whose philosophy is more akin to the UK’s new Conservative leader.
Truss has underscored in New York her contentious belief that tax cuts for the better-off would benefit everyone, as her new government tries to get a grip on soaring energy prices.
An emergency budget on Friday is expected to roll out tax changes that would disproportionately benefit Britain’s rich. The Times newspaper said it could also come with a surprise cut to property purchase taxes.
“I don’t accept this argument that cutting taxes is somehow unfair,” Truss told Sky News in New York, ahead of her bilateral meeting with Biden and debut speech Wednesday at the UN General Assembly.
“What we know is people on higher incomes generally pay more tax. So when you reduce taxes, there is often a disproportionate benefit because those people are paying more taxes in the first place,” she said.
The contrasting economic visions are only one point of dispute between Truss and Biden.
The White House has made clear its unhappiness about the new prime minister’s hard line on Brexit and Northern Ireland. Truss conceded that a post-Brexit UK-US trade deal was unlikely for years.
But in her speech to the UN, she was set to defend her economic vision as a way to corral Western democracies against foes such as Russia.
“We want people to keep more of the money they earn, because we believe that freedom trumps instruction,” Truss was expected to say, according to excerpts released by Downing Street.
“We are reforming our economy to get Britain moving forward once again.
“The free world needs this economic strength and resilience to push back against authoritarian aggression and win this new era of strategic competition.”
Truss was to say that Ukraine’s recent battlefield advances against Russian forces was “the story of freedom fighting back”.
“But this must not be a one-off,” she will say, urging Western unity.