The Centre for Policy Studies today released its report “How To Cut Corporation Tax” by David Martin. We take a look at some of the news coverage for this important paper.
“The Centre for Policy Studies is urging David Cameron to cut corporation tax to as little as 10 per cent because it is the “only source of a viable economic recovery”.
In last year’s Budget, George Osborne, the Chancellor, pledged to cut the main rate of corporation tax to 23 per cent from the current 26 per cent by 2014, the lowest rate in the G7 group of leading economies. A report by the think tank, however, argues that the Government needs to take a more drastic approach, reducing it to 20 per cent in this year’s Budget.”
“SLASHING the rate of corporation tax will stimulate the economy and make the UK a more attractive destination for businesses relative to other advanced economies, a report from the Centre for Policy Studies (CPS) argues today.
The government currently plans to cut the rate of corporation tax by one percentage point per year, taking it from the current standard rate of 26 per cent to 23 per cent by 2014. The rate stood at 52 per cent in 1982.”
“The question is, how would the rest of the UK respond to this? Corporate tax rates of between 10 and 15 per cent are fairly common among smaller European nations. Not so the big guns. It is a well-known fact about certain forms of tax that if you cut them you generate more revenue. The Centre for Policy Studies argues that this is particularly true of corporation tax, which has halved from 52 per cent in 1982 to its current level of 26 per cent, and falling, in the UK. This has had a striking effect on revenues, which have increased from 2 per cent of GDP to 2.8 per cent (equating to the not-inconsiderable sum of £43.2bn).
Proponents of cuts to corporation tax say it not only attracts more businesses from overseas and encourages new ones to set up here, it also boosts confidence and provides businesses with more revenue for investment, and crucially, job creation. Which means even more profits and more revenues for the taxman.
Date Added: Wednesday 1st February 2012