"Thatcherism Was All About Cutting Taxes."
Sort of. Britain became notorious in the 1970s for its astonishingly high rates of tax on top earners, prompting many a rock star and CEO to seek more hospitable financial climes. One of the Thatcher's first moves after her election as British prime minister in 1979 was to slash income taxes. (In 1979 the top rate was an astonishing 83 percent, which her government cut to 60 percent.) By reducing the tax burden on earnings, she aimed to unleash long-suppressed entrepreneurial impulses and to make it easier for Britons to get back into business for themselves. And she certainly succeeded. Post-Thatcher Britain has a far livelier and more diverse capitalist culture than it did before she came long.
In stark contrast to today's Republicans in the United States, though, Thatcher acknowledged that it was impossible to balance the government's books without raising revenues elsewhere -- which she did, in her first term, by boosting taxes on consumption. Though government finances during her early years received a huge boost from the flow of North Sea oil (which had begun not long before she became prime minster), the share of revenue from taxes remained high throughout her prime ministership. As Jenkins notes, taxation as a share of non-oil domestic product actually rose, from 35 percent in 1979, to 37 percent by the time she left office in 1990.
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