Plan B as a tax haven is not a viable option for the UK

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I spoke at an event jointly organised by Class think tank and Verso Books (there to promote my new book)  last night at the Institute of Contemporary Arts in London. It was good to share a platform with Faiza Shaheen, Ann Pettifor and Gracie Mae Bradley.

The event was on the economy and Brexit and covered a lot of ground but I began talking about the UK as a tax haven which we are led to believe is Philip Hammond's Plan B. I explained why this was a terrible idea roughly following these notes:

  • Tax haven UK
    • The threat
      • To turn the UK into a low tax nation
    • The problem
      • The world hates tax havens
      • There are now measures in place to beat corporate tax abuse like country-by-country reporting
      • The EU is proposing a tax haven tax list
      • We are members of the OECD
      • Retaliatory measures are possible
    • Will it work?
      • No: there is no evidence low tax rates boost investment, productivity, employment or growth
      • In fact they tend to discourage investment because the tax incentive to spend is reduced
      • They do encourage the artificial relocation of mobile tax bases
        • But usually only if secrecy is available and it is not in the UK
      • And because mobile tax bases are only owned by the wealthy inequality increases
      • Which we now know reduces growth
    • And the Laffer effect?
      • That kicks in at tax rates well over 50% and we don't have those
      • So this is a tax giveaway
    • So why do it?
      • Spite
        • To harm our neighbours
      • To favour the wealthy
      • To punish the economy
      • To make the UK worse off
      • To undermine other governments
      • The very worst of motives
      • And results
    • But there are alternatives

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