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Ok - I'll run with your proposal of a clear link between government incentives such as cuts to corporation taxes and periods of economic growth. I'm admittedly out of my depth here but willing to learn. So I googled to try and find the clear historical links that you are proposing to be "common sense". I looked at the top 5 articles and it made interesting reading:Originally Posted by KerrAvon
http://www.economicshelp.org/blog/21...ease-revenue/: The writer speculates that "For example, if UK cut corporation tax rate to 15% and others maintain the same tax rates – you could expect it to increase inward investment and possibly tax revenue for the UK. However, if others follow suit and cut to the same rate, there will be a very different effect. The UK will not gain any competitive advantage from the tax cut" and goes on to say "If this does occur, the main beneficiaries are companies who get to keep a bigger share of profit. The taxpayer loses out because income and expenditure taxes have to rise to compensate". In short, the writer agrees with you in theory but has no evidence historically that it will happen, even suggesting that companies keep the difference.
Ok - so how about article 2?: http://www.epi.org/publication/ib364...onomic-growth/
The writer here concludes that: "On the surface, it would appear that more robust economic growth is associated with higher corporate tax rates. Further analysis, however, finds no evidence that either the statutory top corporate tax rate or the effective marginal tax rate on capital income is correlated with real GDP growth".
Article 3: https://www.brookings.edu/research/e...onomic-growth/ concludes "We find that, while there is no doubt that tax policy can influence economic choices, it is by no means obvious, on an ex ante basis, that tax rate cuts will ultimately lead to a larger economy in the long run". This writer doesn't write off potential gains: "A fair assessment would conclude that well-designed tax policies have the potential to raise economic growth, but there are many stumbling blocks along the way and certainly no guarantee that all tax changes will improve economic performance".
So, three articles quite randomly surfed seem to show no evidence for your assertions. You say that you rely on "history" so to save me any more searching please could you point to historical instances of where corporation tax cuts have had a demonstrable affect on wealth creation in our economy (I am genuinely inquiring and open minded on this, but you make HUGE assertions that Corbyn's way of raising money for services (and of course there is no statistical definition of properly funded, that's an admittedly loose term but how else do we measure it? I guess what we should say is to raise enough money to make a demonstrable improvement (let others do the measuring!) on public service investment) is negative and your way of creating wealth (through corporation tax and other tax incentives) is right. As I've said before, Labour's proposals are a risk, but why should your proposals be any less of a risk as there appears to be (as yet, I'm sure you may be about to throw something at me!) no actual foundation for them?
Just an addendum: Your throwaway comment "who said life is fair?" is quite telling...
Deal with sources for my statements on tax amounts later 'tater. Gotta get back to work :-(
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Some very interesting points made in this thread, some probably true, some probably bogus, but all with a heavy layer of bias and selective fact picking.
The bottom dollar though is this, in our increasingly complex and challenging position in the world who do you in your heart think would be the best equipped team to do the job?
Corbyn and his cronies?
May with hers?
Fallon with his?
There's really only one, imperfect, contender
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The fact is that the ordinary folk in this country are getting screwed over massively, and it's only ever going to get worse under this shower, because that's what they do, they have no thought or care for ordinary folk, none.
The country is going to face many challenges regardless due to the absurdity that is Brexit, i'd much rather someone who actually gives a damn be in charge rather than someone who doesn't.
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Yes I would totally agree that if we got a better service from private companies delivering (formerly) public services for less than we would pay if we taxpayers owned them, then I would be happy with the situation. I am not against privatising companies on a point of principle. You obviously are putting forward a proposal here that the private companies are performing their operations better, and for less, than they would if they were privatised? This seems over the years to almost to be put over as a given. How do you know? What evidence are you basing this assertion on? Thanks for giving me a great example to go on: We in London do indeed have a publicly owned transport system. And we are surrounded by a network of privately owned rail companies. In my experience (as a regular commuter on the tube) is that the system works very well, is relatively strong and stable (cheap I know, couldn't resist!) and is quite reliable give or take the odd signal failure. Whenever we step onto the platforms of the rail network though we are subjected to short notice cancellations, driver shortage, and delays. I must say that you sir are going on your experience of rail travel, I'm going by a direct comparison between public and private, tube and rail and there is absolutely no contest.
But I wouldn't be so naive as to base my experience of tube and rail to be the sole indicator that privatisation is the best way of operating these services; I would like proof one way or the other. Having read Jones's book (I'm sure you have it winging its way via Amazon as I type!) there are dreadful instances of services being cut to the bone whilst shareholders have profits increased regardless of the quality of service.
As someone who demands (quite rightly) that everyone whose opinion you don't subscribe to provide evidence/quotes to back up their argument, you seem to, if I may say so, frequently have little regard for providing evidence for your own assertions.
So: privatised company better performance than publicly owned. Evidence please?
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I'd go, I think, for the one who puts forward the best policies for wealth creation and fair distribution and can best justify their manifesto, under the challenge of public scrutiny and debate.
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Screaming Lord Such it is then
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Ok, I've been finding and looking through some of the stuff I've read over the last couple of years. From what I can see the figure that is often repeated is £120 billion and that includes tax debt, evasion and avoidance. I've mixed up the terminology and was referring to them all as avoidance. But the figure is widely reported, not made up!:
http://www.taxresearch.org.uk/Blog/2...on-and-rising/
https://www.theguardian.com/politics...nce-nonpayment
http://www.huffingtonpost.co.uk/2015...n_8163018.html
https://d3n8a8pro7vhmx.cloudfront.ne...pdf?1437556345
I accept, as you mentioned at the start of this thread, that there are problems with the PCS report and impartiality of the figures and in the interests of clarity that tax avoidence is only a part of that, but as Owen Jones goes into great detail in his book, and in the report by Wilmott and Sikka (linked to earlier but here it is again if you missed it: http://www.tax.mpg.de/fileadmin/user...h_Willmott.pdf) the figures given annually by the government are as good as guess work. Any figure given, including from both you and me, is at best a stab in the dark but the more we uncover the increasingly ingenious methods of avoidance, and on such huge scales, I wouldn't be surprised if the overall figure for tax avoidance eclipses tax evasion and, just as people on here get angry at benefit cheats, I have every right to be angry about both evasion and avoidance of tax and would like more action from a government to close this. At the very least, I don't want government ministers colluding with both lawyers and corporations for their own profit as they move effortlessly between government and corporation. (again see Jones's book on the specifics there). Avoidance? Evasion? It doesn't matter if an action remains within the law if the action is morally wrong? But I guess a commentator who posts "who said that life is fair?" will have other ideas on that.
Last edited by ragingpup; 15-05-2017 at 05:11 PM.
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Economists are like lawyers (or so I hear); give the same case study to three different economists and you'll get three different opinions. Consider the Brexit debate (such as it was) in which both sides wheeled out expert opinion to support their viewpoint
In respect of the first of your links, it is, of course, entirely correct that the benefit of a UK corporate tax cut would be lost if other countries followed suit, but implicit in that is there is a benefit to be had from such a cut.
In respect of the second of your links please see here for an article in which another economist takes issue with its conclusions: https://www.nationalreview.com/nrd/a...3/new-tax-myth
The third of your links appears to be concerned with income tax rates rather than corporate taxes.
I will stick with common sense approach. We know that changes to taxation affect behaviour. Three examples:
When the government introduced tax relief on mortgage interest in the 80s, the regulations were drafted in such a way as to create an advantage to people who cohabitated rather than marrying. The consequence? - An increase in cohabitation. Nigel Lawson then signalled his intent to eliminate that advantage at a date in the future. The consequence? - A spike in house sales as cohabiting buyers sought to beat the deadline.
On fuel taxation, successive governments sought to encourage people to buy diesel cars. The consequence? – A huge growth in diesel sales with that engine type being chosen irrationally by many motorists who would have no chance of saving money given the amount of miles that are needed to offset the higher purchase costs.
Now they are examples of individuals being influenced by tax, but as companies are run by individuals, there is no reason to assume that tax does not influence corporate behaviour. Indeed, there are two examples in this thread – Starbucks and Phones4U – where companies have behaved in particular ways to reduce their tax liabilities.
With that being the case, my view is that the aim in this country should be to have lower level of corporate taxation with a view to promoting capital investment, R&D and training. My further opinion is that taking money off companies in the form of tax reduces both their ability and their inclination to adopt such beneficial behaviours.
I’ve tried hard to think of an analogy to make my point, but the best I can come up is a dreadful cliché, which is that Labour seems to be concerned with putting buckets out to catch the drips rather than fixing the roof.
You didn’t comment upon my Robin Hood tax point. You are undoubtedly aware of the outcome of the Brexit vote and the threat that creates to the UK financial sector if barrier free access to European financial markets can’t be secured (and you can be certain that both Germany and France have a substantial interest in making sure that it can’t be). Do you think that imposing a substantial tax on the City will act to encourage them to stay or will merely act as an incentive to leave?
In what way do you find my fairness point telling? Do you think life is fair?
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I think the Conservative campaign is predicated upon the notion that Corbyn is the biggest asset that they have (and he is the gift that keeps on giving - I found the recording of his anti-NATO comments absolutely jaw-dropping).
It’s a jolly dangerous game though; the strong and stable mantra is opening them up to ridicule. My guess is that they’ll drop it soon. Alternatively, they may be going for the ‘Go Compare’ effect, in which they hope to make the message so annoying that people remember it.
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Given that the tories are hell bent on a hard brexit regardless of cost to the country, and Labour is committed to finding a softer solution in keeping some sort of access to the single market, then surely a labour, soft exit would be advantageous to the financial sector in this country?
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