BRITAIN: Maggie's Bold New Budget

The Tories cut income taxes—and risk inflation

Campaigner Margaret Thatcher promised to cut taxes and reduce government spending. Prime Minister Thatcher last week began to live up to those promises. As Labor M.P.s in the House of Commons jeered, Thatcher's Chancellor of the Exchequer, Sir Geoffrey Howe, presented a tough new budget that was designed, he said, "to restore incentives and make it more worthwhile to work."

The budget reduces the highest income tax rates (for those earning a net income of more than $50,000) from 83% to 60%; the standard rate will...

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