Policy – A Race To Cut Taxes Won’t Help The Economy

Amongst everything else in the Autumn statement, something which wasn’t much picked up on was the Chancellor’s move to further reduce our corporation tax rate. It’s not surprising; the left have enough bones to pick with the budget without picking up on this seemingly inconsequential move. Besides which, corporation tax cuts are hard to argue with, what with the economy the way it is, perhaps it’ll actually help grow the economy…

But there is simply no substance to that notion. Just take a look at countries with the highest and lowest GDP growth rates. And then take a look at effective tax rates.

Simply put, there is no correlation. But the Chancellor is hell bent on making the UK a low corporation tax country. Putting us in a position where Korea and Indonesia will have higher tax rates than us… Seriously? We’re supposedly struggling to bring the deficit down, and yet we’re making ‘low tax countries’ look like Socialist states…

Yes, I’m sure that oppressive levels of tax harms our economy, and enticing investment is important. But a strong, growing economy is far more important to 9/10 companies, and the 1/10 companies that ONLY care about low taxes are not the sought of companies we should be welcoming. If revenues are an issue for us, corporations shouldn’t get a free pass from paying their fair share whilst the rest of society is squeezed.

It was an awful budget, and many are going to suffer even worse than they were doing already because of it. Choosing where the burdens fall is not an easy one, sure, but I hope I’ve pointed out yet another way the Chancellor could raise just enough revenue to ease the suffering of just a few people.

Cheers

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About iwastoldtheredbegin

Politics of the Left Wing and Liberal variety, plus gin!
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