The Problem With Government Raising Taxes on the Rich

In a highly unequal economy such as Britain's, you've got this section of society that is still able to spend really without these interest rates particularly affecting them. But for people further along in life and people with much larger quantities of wealth, it's true that monetary policy may not be a way of reducing the overall amount of spending in the economy. And that's where fiscal policy and tax rises come in. There has been a new vogue for what the US Treasury Secretary Janet Yellen has called modern supply side economics. The idea being that because the rich are too strangled by taxation and regulation we don't have enough innovation and dynamism in our economy. This could unleash more productivity gains