Hong Kong is to implement massive tax cuts:
"Hong Kong's financial chief said Wednesday he will cut salary and corporate taxes and abolish duty on beer and wine after a booming economy pushed the city's budget surplus to a record high. In his maiden budget speech, Financial Secretary John Tsang said he would increase spending on health services and introduce measures to bridge the widening wealth gap and reduce air pollution.
Duty on beer and wine -- currently at 40 percent -- will be cut with immediate effect.
Tsang estimated the budget surplus would reach a record 115.6 billion dollars (14.8 billion US) in the fiscal year to March, four and a half times the government's forecast and nearly twice as much as last year's figure. The territory's fiscal reserves will reach 484.9 billion dollars, he said. Tsang attributed the surplus to higher-than-expected tax revenues from the city's booming stock and property markets as well as company profits and salaries."
This combination of swelling reserves and surpluses and hefty tax cuts is possible thanks to the dynamic returns to Hong Kong's already low taxes and the returns of broader economic liberalism. Over many years the territory has had low taxes and rapid economic growth has left it with an income per person higher than that in Western Europe or Japan. It places first, year after year, in the Index of Economic Freedom. For more on Hong Kong's liberal economic order see the first 1980 episode of the late Milton Friedman's classic Free to Choose. That commitment to low taxes and free-market economics creates growth which brings with it revenues that can fund future tax cuts in an incredible virtuous circle.
Britain, unfortunately, is going in the opposite direction with increased taxes hurting the economic growth that builds prosperity for the future. That's quite a price to pay for little result in the public services.