BlueAnorak
Well-Known Member
- Joined
- 31 Oct 2010
- Messages
- 30,098
But thats not in the Labour Party manifesto.And you're ignoring the fact that lower corporation tax rates have not resulted in investment either, which has impacted growth, as I've said about 3 times now. Companies are hoarding cash so if they won't invest it, the government may as well take it off them via increased tax rates and do that for them. Or it can give them the choice by incentivising investment via tax reliefs.
Then Labour come along, push up tax to 26% but give 100% relief for specified investment. So Company A still make £100m but invest £20m of that and pay 26% on £80m. That's a fraction less tax than they were paying under this government but that investment generates growth, which generates higher tax revenues.
The money is assigned to pay for stuff - NOT to improve investment.
(Not that they will actually get that cash, firms will put up prices to compensate and make folks redundant and investment would totally dry up and the economy would go into recession)
Your policy would be reasonably good at amuch lower level of increase - say 2.5% - Invest or lose the profit.