Apr 04 2012

More on those quack UK corporation tax cuts

Posted by: Nick Shaxson in: Thoughts

I had a piece in the Guardian recently commenting on the UK budget, and particularly the economic illiteracy that lies behind corporate tax-cutting. It followed my LSE blog, my longer Treasure Islands blog, and Liberal Conspiracy article, along the same lines. (As I’ve mentioned, this argument constitutes low-hanging fruit for those who would oppose the current UK coalition government; it’s a bit weird that the opportunity hasn’t been seized yet.) But I think the argument is ripening, and it will gain more prominence.

The blog of tax writer Andrew Goodall (highly recommended by Tax Research, and by me) points to that comment I noted by Martin Wolf of the FT about corporation taxes, which is entirely in line with my thinking. Then came a more recent article by Robert Peston, the BBC’s chief economics commentator, aptly entitled Big Business and Treasury Capture Government, where he notes that this headline

“is trebly true of the cut in the top rate of income tax, the accelerated reductions in corporation tax and the reform of taxation for multinationals based here (the controlled foreign company rules)”

(If you want more specifics on the capture, see this, or this.)

On the TJN blog I recently asked “Could a new consensus emerge on corporate taxes?” Latest evidence is that such a consensus is starting, albeit slowly at first, to emerge. The opposition parties now just need the courage to understand it, then embrace it. Then gird up for a fun turkey shoot.

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