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[KerrAvon]

@ raging.

Blimey. If word count mattered this argument would have been over a long time ago.

Firstly you may wish to check where I claimed that reducing the Corporation Tax rate would necessarily increase the tax take. I haven't, so it seems a little harsh that you demand that I produce evidence of the same. In reality it is a continuum. A 0% tax rate would have companies flooding into the UK but no tax take. If the tax rate was put at 100%, you'd receive money only for so long as it took for businesses to close down.

It is impossible to conclusively demonstrate that any particular model produced a particular effect because economies are so complex making it necessary to have two identical economies and do a in one b in another to be certain of the consequences of both.

What it is possible to do is see what happened to the UK under the last Labour government that ran a significant tax and spend strategy in the 70s and what has happened since in the economy where you have the JRF report linked to by MMM, which confirmed the progress that was made at reducing poverty in the UK until the 2008 crash and the austerity that followed.

And despite the post 2008 malaise enough jobs have been created in the UK to effectively deliver full employment despite the continued influx of UK migrants.


You are wrong to suggest that it is a certainty that raising corporation tax X amount would raise X amount for tax revenues. It isn't a fact (or a FACT as you put it for some reason), because business will respond. They have a fiduciary duty to their shareholders to do so.

Is their evidence that companies take tax rates into account when deciding how to operate? Of course there is. Take Starbucks (if you like fairly dull coffee). They used a licensing arrangement to effectively export the profit on their UK operation to the Netherlands in order to take advantage of lower tax rates. That's one way of responding. Another way to do so is to quit the country. Is there evidence that companies would at the very least consider doing so. Yes - in recent weeks we've had companies queuing up to warn of the consequences to their UK operations if Brexit imposes additional costs upon them. There is no reason to suppose that they would react differently to additional costs imposed upon them by a Labour government.

Strangely, despite proclaiming your fact (or FACT) you then go on to concede
I'm not trying to hide that it gives birth to uncertainty about how businesses respond, and this has to be weighed up in the decision a government will have to weigh up. I don't claim to have evidence that NO jobs would be affected by such a raise, which suggests that your fact isn't a fact after all.

Your concession leads to two questions:

1.What changed to move you to uncertainty from your earlier confident assertion (of fact?) that the Labour tax plans would lead only to (as yet undefined) changes to operations falling short of quitting the country?

2. Given that you now accept the possibility of job losses, how many would you consider acceptable for the tuition fee bribe?

[KerrAvon]

Kerr, please stop including other costs, the other costs arent included in this argument,what don't you get about that, you're picking figures out of thin air trying to justify a false position.....

Please take into account the cost of corporation tax, for each dealer, one in the UK and one in Germany, their costs are in line with what the corporation tax rate is, so for example the German dealer will be 10% dearer, the UK raises their corporation tax 5%, this means that it is still cheaper by 5% than the German dealer, regardless of other costs, because corporation tax is already included in all those costs...or you could just do it like this....

Take all costs out of the equation, here's the only equation that matters in this argument;

So, let's take Germany as our example, the UK has a corporation tax of 20%, if Corbyn gets in power we raise that to 25%....Germany's corporation tax rate is running at 30%...

So, we've gone from having a tax at a rate of 10% lower to one of 5% lower...so any companies will obviously be LESS attracted, but will still be better off here.

This question is purely about corporation tax, get with the programme eh....

I see you have mentioned Osborne and put him up as a shining light of economics, please tell me how much the national debt has risen under his tenure, while we're at it, the London Standard has just released it's figures and has lost £10 million since he took over as editor, yep, he's got his finger on the pulse that lad.

You do realise that the car buying thing is an analogy don't you? I used it to try to explain how a number of factors play into the making of a decision in a business or otherwise.

It would be ridiculous to take other costs out of the equation, because that is not how decisions are made. Or maybe that is how you do make decisions and you'd buy the more expensive car, because the paint element of the total price.

Widget man can't take other costs out of the equation, because he is running a business. He can't decide to forget that, say, the English Channel, means that he has to pay far more than his German rival in transport costs when selling into Europe (Ireland excepted).

I can't recall if you are a betting person, but I believe there is a concept called handicapping where some horses have to carry additional weight. Well, the UK is handicapped by it's location.

P.s. If you decided to buy you car in Germany, you'd pay foreign exchange costs and have to pay to get it back to the UK, which is kind of part of the point I'm making.

P.p.s. You didn't answer my question: which approach is more job creation friendly - upping the minimum wage and reducing corporation tax or upping them both?

[WanChaiMiller]

@ raginpup

.....It's strange that you offer that advice, however, whilst advocating a return to the tax and spend policies that so spectacularly failed the country in the 70s. Practise what you preach maybe?

I thought we'd establish it was inflation and recession during the Heath government that caused the economic problems of the middle / late 70s under Labour.

[KerrAvon]

I thought we'd establish it was inflation and recession during the Heath government that caused the economic problems of the middle / late 70s under Labour.

Ah... The longest period in power that old Labour had, but none of the woes of that period can be attributed to them...

They actually were not too a bad government after the IMF made them cut their spending in 1976 (in return for a massive loan to stop the country going bust) and I think Dennis Healey was possibly the best prime minister that we never had, but their inability to take on their union paymasters did for me them in the end.

[WanChaiMiller]

Rate of Corporation Tax isnt the biggest influencer in making a decision of where to locate. Low Corp Tax in Ireland helped them in the past but equally without access to EU markets it would have been meaningless. Currently our relationship with the EU will have the biggest impact.

Just as a reminder during the first part of the 80s the Thatcher government squeezed money supply that forced a recession closing down huge numbers of businesses and brought about mass unemployement (depending on how you calculate figures upwards of 5m out of work - 10% of the population).

[KerrAvon]

I haven't suggested that corporate tax rates are the most important factor. They are a factor and are capable of being an insignificant factor or an important one depending on the size of any change.

Unemployment and business closures were rising under Labour and continued under Thatcher as the union driven wage inflation that Labour had failed to control started to bite.

[KerrAvon]

P.s. if Brexit does impose additional costs on business it would be particularly risky to have a government that imposed yet more costs through taxation, the minimum wage and additional public holidays (apparently), would it not?

[gm_gm]

Rate of Corporation Tax isnt the biggest influencer in making a decision of where to locate. Low Corp Tax in Ireland helped them in the past but equally without access to EU markets it would have been meaningless. Currently our relationship with the EU will have the biggest impact.

Just as a reminder during the first part of the 80s the Thatcher government squeezed money supply that forced a recession closing down huge numbers of businesses and brought about mass unemployement (depending on how you calculate figures upwards of 5m out of work - 10% of the population).

We now have the highest employment I think ever, low corp tax always instigates investment and at the moment Fintech and Hightech companies are the future. These companies can trade from anywhere in the world but raising their taxes would surely mean they would locate somewhere else.

[millmoormagic]

You do realise that the car buying thing is an analogy don't you? I used it to try to explain how a number of factors play into the making of a decision in a business or otherwise.

It would be ridiculous to take other costs out of the equation, because that is not how decisions are made. Or maybe that is how you do make decisions and you'd buy the more expensive car, because the paint element of the total price.

Widget man can't take other costs out of the equation, because he is running a business. He can't decide to forget that, say, the English Channel, means that he has to pay far more than his German rival in transport costs when selling into Europe (Ireland excepted).

I can't recall if you are a betting person, but I believe there is a concept called handicapping where some horses have to carry additional weight. Well, the UK is handicapped by it's location.

P.s. If you decided to buy you car in Germany, you'd pay foreign exchange costs and have to pay to get it back to the UK, which is kind of part of the point I'm making.

P.p.s. You didn't answer my question: which approach is more job creation friendly - upping the minimum wage and reducing corporation tax or upping them both?

And you havent answered mine, you've just dodged again, and of course i realise the car dealer thing was an analogy, but once again you're playing the lawyer, moving the goalposts to suit your argument and try and dilute mine, leave your job at home and try and look at it like a normal person would instead of trying to find an angle that suits you.

We're talking about corporation tax arent we, ours is at 20%, Germany's at 30%, given that, our goods are potentially 10% cheaper, of course the extra costs of exporting those goods to Germany could be considered, that doesn't take away from the fact that we're still cheaper in terms of corporation tax. We export 50% to the EU, in your analogy i really wonder how on earth we manage to do that given those companies must, by your words, be loss making, it's not that hard Kerr, stop trying to flannel and squirm.

[millmoormagic]

We now have the highest employment I think ever, low corp tax always instigates investment and at the moment Fintech and Hightech companies are the future. These companies can trade from anywhere in the world but raising their taxes would surely mean they would locate somewhere else.

Lovely this high employment malarkey, love all these low paid, low skill jobs, usually in foreign owned companies, tories love it also, although they hate immigration, even though to fill those low paid low skilled jobs they need immigration, a quandary indeed to the xenophobic tories isn't it.