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[ragingpup]

Agree on vat.

Note our vat threshfold was raised by this Gov from 17.5% to the top band of 20%.

Interesting therefore that the Tory supporters on here are up in arms about a suggested hike in Corp Tax which has less impact than the rise in VAT - except....CT effect their precious share divvis and vat hits the poor.

I think that this pretty much hits the nail on the head....

[gm_gm]

Agree on vat.

Note our vat threshfold was raised by this Gov from 17.5% to the top band of 20%.

Interesting therefore that the Tory supporters on here are up in arms about a suggested hike in Corp Tax which has less impact than the rise in VAT - except....CT effect their precious share divvis and vat hits the poor.

That’s the point wan, increase vat before corptax

[KerrAvon]

Agree on vat.

Note our vat threshfold was raised by this Gov from 17.5% to the top band of 20%.

Interesting therefore that the Tory supporters on here are up in arms about a suggested hike in Corp Tax which has less impact than the rise in VAT - except....CT effect their precious share divvis and vat hits the poor.

By threshold, I assume you mean rate?

The Labour government reduced the level of VAT in the aftermath of the 2008 crash with the aim of stimulating the demand side of the economy and maintaining business confidence. That demonstrates that Labour at the time had an understanding of the stimulating effect of tax cuts, which has now been lost. It was a bold move and, I think, a sensible one, but it could not be a long term policy, given that high levels of consumer debt was one of the issues facing the economy at the time (and now).

It was necessary to increase VAT to seek to maintain public services whilst reducing the budget deficit. I will take it as read that you consider both to be desirable outcomes?.

Does VAT hit the poor? It is a consumption tax and so hits those who do the most consuming...

Dividends are essential to keep pension funds growing. You may have noticed that some company schemes have been in trouble. To a significant degree that is down to lower dividend levels in the aftermath of 2008. With that being the case 'divis' are precious to large swathes of the population.

[KerrAvon]

1. Usual lawyer word twisting. The fact I was referring to was the actual amount that a tax cut costs the public purse if there are no behavioural responses. E.f. The IFS stated that the cutting of the various rates of corporation tax since 2010 costs us at least £16.5 billion a year. And as I clearly said in my very next sentence this doesn’t take into account behavioural responses. But it is a solid, factual amount, X – Y that can be calculated and presented as a top line amount before you look into what gains you could make by subsequent benefits to the economy. Surely we should be looking at what we are getting in return for this in related increased revenues for public services. Surely, in return, there should be better proof of benefits than what you are providing, which are pretty much faith based.

So now you are distancing yourself from my whole point, everything I have ever typed in argument with you, that cutting corporation tax appears to be costing us too much in what we lose from the public purse, that although there are economic gains (as posted by you and others on here, which I accept) it does not appear to compensate for the £16.5 billion it costs us in services. It seems bewildering that although this has been the whole basis for my argument with you, you now appear to not notice that this was my point. Oh dear…

As I said to you when I was unsuccessfully trying to avoid this argument with you again, there is no real point debating it any more than we did do months ago as we both clearly have our points, we both have evidence for our points and as you now say it is impossible to say whether one model produces particular effects. However, if you’re going to promote so passionately an economic stance that is costing us £16.5 billion per year (before behavioural responses) then it is not unreasonable to expect that there would be greater evidence of that costs being recovered via the benefits that businesses are getting from it? It’s costing us a hell of a lot for what at the end of a day is your very own little economic faith….

2. I would accept approximately 2,113 job losses in return for an increase in corporation tax that would offset the manifesto policy on student. By the same ridiculous line of questioning, how many public service jobs would you consider acceptable to pay for a 1% cut in corporation tax?


Separately to the You refer to the JRF report backing up your views that the economy has improved poverty in recent years. Is this the same report that in a subsequent press release stated that:

• 400,000 more children are living in poverty than in 2012

• 300,000 more pensioners are living in absolute poverty than in 2012

• “Very little progress has been made in reducing poverty among working age adults”

Campbell Robb, chief executive of the independent Joseph Rowntree Foundation, said:

“These worrying figures suggest that we are at a turning point in our fight against poverty. Political choices, wage stagnation and economic uncertainty mean that hundreds of thousands more people are now struggling to make ends meet. This is a very real warning sign that our hard-fought progress is in peril.

“Action to tackle child and pensioner poverty has provided millions of families with better living standards and financial security. However, record employment is not leading to lower poverty, changes to benefits and tax credits are reducing incomes and crippling costs are squeezing budgets to breaking point.

https://www.jrf.org.uk/press/uk-pove...-turning-point

Trashed by your own source. Well done lad, well done.

I think you may be getting confused. You claim with my 'The fact I was referring to was the actual amount that a tax cut costs the public purse if there are no behavioural responses.' whereas what you actually said back in post 151 was 'The one certainty is that by raising corporation tax X amount would raise X amount for tax revenues, that is a FACT. How did your FACT about raising Corporation Tax become one about reducing it? I'm fascinated. Are you sure that you know what you meant?

When you have worked out whether the fact that you were talking about related to cutting or raising tax do let me know, but I will tell you in advance that it is not as you claim that the net effect of a tax change is a a solid, factual amount, X – Y that can be calculated. Even taking into account behavioural responses and calling that Y it is only ever possible to estimate both X and Y (with Y being particularly hard to estimate with any accuracy) so why it may be a factual amount, it can only ever be estimated.

You are also wrong when you say that the Corporation Tax cuts cost us £16.5 billion in services. In making that claim you ignore the behavioural changes that you acknowledge exist and also ignore the fact (or FACT) that the country is running a budget deficit and so rather than being a loss to public services the best case you could make is that the deficit was somewhere less than £16.5bn p.a. than it would have been.

I see that you are quoting the IFS on Corporation Tax. You miss out the observations that:

In the same way that we would expect rate cuts to be less costly in the medium to long run because lower rates boost investment, we would expect rate increases to be more expensive because they reduce investment which, over time, would translate into the UK having a smaller capital stock.

You miss out that despite now having a low headline rate:

Compared with other countries, the UK has a much less competitive tax base, largely due to a particularly ungenerous set of capital allowances.

You also miss out:

Under current plans, corporation tax receipts are set to form a smaller, and possibly decreasing, proportion of receipts in the future. This is not necessarily a concern. It has long been recognised that corporate income taxes can distort incentives in a number of harmful ways, and they are thought to have a particularly damaging effect on economic growth. Corporate tax is top of an OECD ranking of the most damaging types of tax.

Perhaps most importantly for your argument, you miss out the obvious:

Corporation tax is ultimately paid by people - through reduced pension and savings growth, job losses, lower wages and higher prices.

To be fair, it's not clear whether it is you that is selectively quoting the IFS or whether you just pulled the headline figure from a dodgy Labour Party press release, but either way, selective quoting is a dangerous game.

Here's the IFS on Corporation Tax: https://www.ifs.org.uk/publications/9207

You would accept approximately 2,113 job losses in return for an increase in corporation tax that would offset the manifesto policy on student? By 'student', I assume you mean the Tuition Fee bribe? I suspect you are not taking the risk of job losses seriously (perhaps working on the basis that you are in public service and so won't be affected - I'm alright, Jez). Come on, give a serious figure -you support the bribe so be clear about what consequences you are willing to accept for it - 2,113 would probably represent the losses from a tiny part of a supply chain if, say, Siemens decided to quit the country or Pfizer got it's hands on Astrazeneca and stripped it.

I think the country has fewer public servants than it is desirable for it have over the longer term, which is why I support growth friendly policies rather than the destructive, short termist, sound bite friendly, anti-growth policies that Labour are offering. That's kind of the point of my involvement in this thread.

How am I trashed by my own source when it says exactly what I said it did? I think you may be confused again. I said that the report confirmed the progress that had been made in reducing poverty in this country, which progress only faltered after the financial crisis of 2008 and the aftermath thereof, which is what it does say. We are dealing with the consequences of a profound shock to the world economy, coming to terms with the emergence of several powerful economic competitors and, latterly, dealing with the uncertainty surrounding Brexit. Of course times are difficult. In quoting JRF you are, however, once again, selectively quoting and miss out passages such as: Over the last 20 years the UK has seen very significant falls in poverty among children and pensioners , which begs the question that I ask is why would you want to turn your back on the economic strategies that have delivered that and return to the 'tax, spend, cover your eyes and ignore reality' policies of the 70s.

I like the JRF very much, but is important not forget their agenda when reading their output. They also use 'relative poverty' as measure of poverty, which produces the absurd outcome that doubling the income of everyone in the country would have no effect on poverty rates.

[gm_gm]

Agree on vat.

Note our vat threshfold was raised by this Gov from 17.5% to the top band of 20%.

Interesting therefore that the Tory supporters on here are up in arms about a suggested hike in Corp Tax which has less impact than the rise in VAT - except....CT effect their precious share divvis and vat hits the poor.

Thats not the threshold Wan...the threshold is the point at which tax becomes payable its £85k in UK and something like £30 in Germany

[Grist_To_The_Mill]

Amazing that in these run down areas with lots of "child poverty" that vape shops and tattoo parlour do so well.

[WanChaiMiller]

For the same reason that I have given to MMM time and time again, which is that Corporation Tax is just one cost to business (arguably it isn't a cost, given that it is a tax on profit, but the effect is the same for the purposes of this thread). A decision about where to operate is a fine one based upon looking at a number of competing factors.

If there is an argument against the proposition that increasing the tax rate reduces the attractiveness of the UK to do business and will therefore lead to lower levels of investment then I am still waiting for someone to give it. As Grist points out, making a change to such a significant factor alters the equilibrium and will necessarily produce a reaction, with none of the possibilities being job/worker friendly.

Many German companies have a British presence, two of them, Siemens and BMW, have warned that they will re-think their presence here if Brexit increases their costs. If there are reasons to believe that they would not react in a similar fashion to increased costs imposed by a Labour government then I’m still waiting for someone to give them.

An increased Corporation Tax rate is bad for levels of employment and investment. It really is as simple as that. With that being the case, why can't a Labour supporter indicate how many job losses they consider acceptable to fund the tuition fee bribe?

All things being absolutely equal then I get a variable like Corp Tax could be a deciding factor. But all things are not equal.

For me location (like access to markets, cost of labour, available workforce, rent, rates, etc) is the prime consideration way ahead of Corp Tax.

[WanChaiMiller]

Currently there are many companies relocation the Germany where, as I understand it, the rate of CT is 10% higher than the UK.

[Lasterman]

Amazing that in these run down areas with lots of "child poverty" that vape shops and tattoo parlour do so well.

Be fair, it can't be easy to afford a Playstation 476 AND a tattoo of some crappy song lyrics on your tit.

[WanChaiMiller]

Kerr.......With that being the case, why can't a Labour supporter indicate how many job losses they consider acceptable to fund the tuition fee bribe?.....

None. The money already exists in the economy. We pay it out in Student loans. Only difference is we find a different way of repaying it without it falling on the individual. Business benefits and should accept some of the responsibility.