Discussion about\u00a0corporation\u00a0tax continues unabated, and I am \u00a0looking forward to tomorrow and the\u00a0Parliamentary\u00a0Accounts Committee hearing. With a little luck I will be there.<\/p>\n
What interests me today are the comments of Lord Myners, a Labour\u00a0peer\u00a0and former City person, who told the Telegraph today<\/a>:<\/p>\n \u201cCorporation tax for an MNC operating in the UK is close to being a voluntary payment,\u201d he said. \u201cThe problem is that the tax environment many MNCs are interested in is a zero tax environment.\u201d<\/p>\n Lord Myners said that the Government\u2019s reductions in corporation tax \u2014 which will fall to 22pc by 2014 \u2014 would not work.<\/p>\n \u201cYou either shrug your shoulders and say you get benefits from secondary effects though employment taxes, VAT, the multiplier effect, and so on. Or alternatively you look for some other form of taxation.\u201d<\/p>\n \u201cIf that were to be the case, some form of sales tax has attractions.\u201d<\/p><\/blockquote>\n<\/div>\n I agree,\u00a0corporation\u00a0tax is not working - and that's in no small part because of the changes George Osborne has introduced that are\u00a0guaranteed\u00a0to make sure that is the case. But to suggest a sales tax is a terrible idea.<\/p>\n Corporation tax is a tax on capital - on the wonders of companies, and despite all rumours to the contrary claimed often by right wing pundits US\u00a0government\u00a0based research suggests that's what it achieves.<\/p>\n A sales tax on the other hand is a tax on consumption and just like VAT it would hit the poorest hardest - the exact opposite of the purpose of corporation tax.<\/p>\n I am disappointed a former Labour minister could suggest such a reform. I\u00a0sincerely\u00a0hope it never happens. The result would be capital\u00a0going\u00a0untaxed - the exact 0% tax option they're\u00a0looking\u00a0for now - whilst ordinary people in this country would pick up the burden. An idea that\u00a0achieves\u00a0the exact opposite of what is intended has to be a very bad one.<\/p>\n","protected":false},"excerpt":{"rendered":" Discussion about\u00a0corporation\u00a0tax continues unabated, and I am \u00a0looking forward to tomorrow and the\u00a0Parliamentary\u00a0Accounts Committee hearing. With a little luck I will be there. What interests
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