Well at least we know where Labour stand now. They plan to increase day to day (i.e. non-investment) spending by about £80bn by 20223/24 and reckon that they can cover that by tax rises.
Far from the modest corporate tax rises that ‘leave us competitive’, the Institute for Fiscal Studies say that to fund Labour’s day to day spending increases will increase overall corporate tax rates to the point where they are the highest in the G7. I wonder what effect that and the threat of nationalisation will have on inwards investment (i.e. jobs) into this country?
The IFS has also pointed out that taxing business does not mean hitting the ‘fats cats’ and ‘elite’ in the manner that Labour class warriors are trying to sell. The money they pay over has to come from somewhere, with the likely ‘somewhere’ being their customers and employees and in the form of reduced dividends being paid to savers and pension funds.
I listened to Shami Chakrabarti last night on Radio 4 and caught a bit of John McDonnell on breakfast TV this morning. Both had the IFS’s views put to them and both simply went into denial mode. I think that they genuinely believe that denials are enough – say it often enough and it will become the truth – that they can defy economic gravity if they don’t look down (although, in fairness, Chakrabarti sounded like she hadn’t got a clue and was simply reciting from a crib sheet).
So who am I to believe? A group of politician’s who used to praise the Socialist revolution in Venezuela or the independent economists of the IFS? Tough one.
On personal taxation, you have the views of people like John Caudwell – a self-made man who set up a business in a caravan in his mum’s garden and who is said to be the UK’s highest tax payer. It looks like him and his tax payments are going to be offsksi if Corbyn gets in:
https://www.theguardian.com/business...d-higher-taxes