Does Hunt Want To Grow The Economy Or Shrink It?
The Tax Payers Alliance called in vain for the planned increase in corporation tax to be scrapped, saying “The TPA joins three former chancellors in calling for the rise to be scrapped.
Using our dynamic tax model, built in conjunction with Europe Economics, our team revealed that the chancellor’s plan to dramatically increase corporation tax in April is estimated to hamper the UK economy by £30 billion.
We can already see the effect of the planned increase with AstraZeneca’s announcement that it would locate a new manufacturing plant in Ireland rather than the UK. The company’s CEO Pascal Soriot specifically cited the UK’s “discouraging” tax regime.
Our chief executive, John O’Connell, hit the nail on the head saying: “An investment shortage lies at the heart of our economic woes, and scaring off successful firms will make the problem worse.”
Ireland's "headline" corporation tax rate is 12.5%, however, foreign multinationals pay an aggregate tax rate (ETR) of 2.2–4.5% on global profits "shifted" to Ireland. Thus, foreign firms pay 80% of the total despite employing just 25% of the Irish workforce. It may not remain that way for too long, however, as Brussels tries to standardise tax rates throughout the protectionist bloc.
Now, imagine if the UK, free from EU red tape, were to match that. Incoming taxes on shifted profit would be immensely beneficial for the UK economy.
Whitehall seems to operate on the basis that it cares little for the economic health of the nation, but more for balancing the government’s books at the expense of the taxpayer that it regards as its milch cow.
The chilling effect of the Chancellor’s budget will soon become apparent. The BBC calmly told us “Living standards are still expected to fall by the largest amount since records began, according to the OBR, but the decline will not be as bad as it had forecast in November.” Oh, that’s all right then…
This party supports restricting the growth of the public sector through cutting the head count and reducing taxes so as to boost the economy.
Martin Day & Andrew Withers FRSA