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Biden Jabs at 'Trickle-Down Economics' as Truss Announces UK Tax Cut Plan Ahead of Bilateral Meeting

© AFP 2022 / DANIEL LEALBritain's Prime Minister Liz Truss leaves the 10 Downing Street, in London, for the House of Commons to announce her energy price plan, on September 8, 2022
Britain's Prime Minister Liz Truss leaves the 10 Downing Street, in London, for the House of Commons to announce her energy price plan, on September 8, 2022 - Sputnik International, 1920, 21.09.2022
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Lizz Truss, who has already promised tax cuts worth £30 billion ($34 billion), reversing a one-year moratorium on green energy levies, is also mulling temporarily cutting the VAT by five percent.
UK Prime Minister Liz Truss and US President Joe Biden sparred over economic policy in the run-up to the two’s upcoming meeting at the annual UN General Assembly in New York.
Truss told Sky News on Tuesday that her own tax-cutting plans will initially benefit the rich more than the rest of Britain, arguing that the country’s economic growth would “benefit everybody” at the end of the day.
She said that she doesn’t “accept this argument that cutting taxes is somehow unfair,” adding, “I mean, what we know is that 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.”
The British PM also confirmed reports that Chancellor Kwasi Kwarteng will scrap caps on bankers' bonuses in the City of London, a move that was earlier slammed by MPs and trade unions.

“We haven't had enough capital investment and yet we have one of the world's best financial services centers. So what I want to see is that money in the City of London put to good use across our country - and yes, I'm prepared to do what it takes to get that money flown,” Truss said.

This was followed by Biden appearing to take a swipe at the UK PM’s remarks, lashing out at the economic theory that cutting taxes for businesses and the wealthy will see the benefits “trickle down” into the pockets of poorer workers.

“I am sick and tired of trickle-down economics. It has never worked. We're building an economy from the bottom up and middle out,” he tweeted later on Tuesday.

Truss’s spokesperson, however, pointed out that “any suggestion that it’s in some way a direct criticism of UK policy would be ludicrous.” According to the spokesperson, “no two countries’ economies are structured in the same way – each have unique challenges.”
Truss and Biden are expected to discuss the issues pertaining to economy, energy crisis and the Northern Ireland Protocol (NIP) when they meet on the sidelines of the UN General Assembly on Wednesday.
The White House earlier signaled POTUS’ opposition to any unilateral attempt by the British PM to tear up the NIP, amid Washington’s concerns over Truss’s legislative plan to hand UK ministers the power to override the agreement.
Britain's International Trade Secretary Liz Truss arrives at Downing Street in London, Britain February 11, 2020 - Sputnik International, 1920, 14.07.2021
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Top British Trade Negotiator Doesn’t Expect to Reach US-UK Trade Deal in the Short Run
Part of the Brexit trade deal, the NIP keeps Northern Ireland (in the UK) aligned with the EU single market for goods, thus dodging a hard border with the Republic of Ireland (which is in the EU). The concession was conceived to safeguard a vital part of the 1998 Good Friday peace deal that put an end to decades of violence in Northern Ireland. However, the protocol entails some new checks on goods moving between Great Britain and Northern Ireland and has been denounced by unionist politicians for driving a wedge between their community and the rest of the UK.
Ahead of the Biden-Truss meeting, the White House also played down the chances of a US-UK post-Brexit free trade deal anytime soon, saying that they “take a long time to negotiate.”
This was echoed by Truss who made it clear that the UK’s trade deal negotiations with the US will not restart for several years. “I don’t have an expectation that those are going to start in the short to medium term,” she added.
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