Earlier this year I wrote a blog about George Osborne's tax giveaway to big business suggesting the cost was between £5 and £10 billion a year, depending on the method of calculation used (with all workings provided).
It was good to find the FT has caught up with this today, with Vanessa Houlder reporting:
The UK government's aggressive cuts to corporation tax are costing more than £5bn a year, requiring funding from elsewhere in the Budget at a time of spending cuts.
Businesses will pay nearly £8bn less corporation tax a year by 2016-17 after UK chancellor George Osborne pushes through what he terms “the largest reduction in the burden of corporation tax in our nation's history”.
As she then notes:
But at a time when painful spending cuts are being inflicted on Britain's public sector, some critics are questioning Mr Osborne's strategy.
Richard Murphy, a director of Tax Research UK who advises the Trades Union Congress on taxation, says he is unconvinced of the benefits of a strategy that made multinationals like Fiat and Pfizer want to move their holding companies — but few jobs or operations — to Britain.
“It is attracting financial relocations but not much underlying investment and employment. The cost of achieving it is very high.”
Not everyone agrees, of course. I was particularly amused to note that:
Chris Sanger, global head of tax policy at EY, the professional services firm, believes it is a mistake to blame the rate cuts for falling revenues.
They are Chris: look at my workings. I suggest it's not possible to offer another explanation in the light of what is happening on the small business tax take.
And what is more this issue won't go away. Labour has said it will keep the most competitive tax rate in the G7. That still gives plenty of room to correct Osborne's hand out to his chums.
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Rather points up just who the are the scroungers in receipt of Welfare/benefits in our oh so generous country.
I make no comment on scroungers or benefits but allowing someone to keep more of what they earn is not the same as giving them something they did not earn.
If some despotic regime announced a plan to tax right handed people by cutting off one finger and tax left handed people by cutting off two fingers but then had a change of heart and dropped its plans, would you argue that this was unfair because the left handed people had saved two fingers and the right handed people only one?
I think you prove how desperate your arguments are by resorting to such absurd comments
Please don’t call again
Chris
In adeal world, we would have fair and effective pre-distribution of income that would eliminate rent seeking by those at the top. This would ensure that ordinary people received a fairer share of the income their activities generate. This would ease considerably the pressure to re distribute income and wealth.
However, we live in a far from ideal world and a “wealth pump” exists which is working flat out to pre distribute income to the 0.001%!
Thank you Chris for the courtesy of reasoned reply. This acknowledges my argument and puts forward your own and is how debates should be conducted.
Oops! Wasn’t talking to myself, previous post was meant for ‘theremustbeanotherway’
Two fingers and one finger?
The perfect response.
Benefits are paid for through National Insurance contributions and are not “given” nor a handout nor free.
Keeping more of what you earn sounds all well and good, the point we have to discuss is what is a fair division of earnings and how far are from that?
I hope the FSB get behind you on this. I have already complained to them that their support of TTIP, on the basis that it will “benefit the economy”, is in serious conflict with their claim to represent the interests of small businesses.
It doesn’t matter how many half truths, lies and misrepresentation of facts are peddled by those in the Big Business sector – the full truth will out in the end!
The tax burden is being shifted off big business in particular and dumped on individuals and small business because this follows the neo liberal la la land script.
The vast majority end up living in a broken society thanks to Big Business and Billionaire Tax Bandits!
This a heaven for the owners of capital! Not only to they syphon off wealth and resources they force people to pay rent on their own currency (via banking control of 97% of it) because they are not paid enough! Capital has the perfect arm lock on the population add they don’t even see their own debt peonage.
Huber and Robertson (Creating new Money: 2000) reckon that banking control of the money supply causes lost seigniorage revenue of 66 billion a year.
Huber and Robertson’s prescriptions would be a very radical programme but, as I understand it, would lead to a much better economy. I hope one of the more courageous parties picks it up.
It isn’t just the tax giveaways though.. there are also the positive subsidies:
http://think-left.org/2013/05/14/the-hidden-welfare-state/