The Podcast of the Lotus Eaters PREVIEW: Brokenomics | Taxation Is Out of Control
Jun 17, 2025
The discussion dives into the complexities of the UK's tax system and its detrimental effects on employment and entrepreneurship. It critiques rising employer taxes, linking them to job losses and burdens for small businesses. The podcast further analyzes how heavy taxation stifles economic growth, contrasting it with success stories from lower tax regimes. Additionally, it highlights the potential for innovation through reduced state intervention, questioning the need for extensive government control over essential services.
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Taxation Alters Behavior
- Taxation changes behavior by reducing the activity being taxed, like work, investment, and hiring.
- This creates economic inefficiencies and fewer jobs when taxes increase on labor or capital.
Jobs Lost to Tax Policy
- Rachel Reeves' 2022 budget increased employers' national insurance, causing the UK job market to tank.
- Approximately 250,000 jobs were lost due to higher employer costs reducing hiring and suppressing wages.
Capital Gains Tax Hurts Investment
- Higher capital gains taxes discourage investment and asset rotation, tying up capital in unproductive assets.
- Increased tax revenue is modest compared to the economic damage caused by reduced investment activity.