Thursday, July 06, 2017

Quote of the day 6th July 2017

"We collected 55% more last year at the 19% Corporation tax rate than they did at 28% in 2009-10"

(John Redwood MP delivers a "killer fact" on twitter.)

Lower corporation tax means companies have more of their profits available to invest and history shows that they do indeed re-invest much of their after-tax profits. More investment means more productivity, more jobs, more wealth created and eventually, even at the lower tax rate, more tax revenue.

This is why Labour's high tax policies will not deliver better public services.

In my youth a Labour government put tax on investment income up to 98 pence in the pound. It ended with a bankrupt government having to call in the International Monetary Fund to borrow money from them, and the IMF insisted on drastic cuts as a condition of the loan, including the most savage cuts ever imposed on the NHS in it's entire history

3 comments:

Anonymous said...

More investment means more productivity - is that why Britain is so productive?

Chris Whiteside said...

Britain has done relatively well over the past seven years in terms of growth in national output and providing more jobs - and incidentally most of the millions of jobs created have been permanent full-time jobs.

We have not fared as well as we need to in terms of growth in either productivity or wages.

More investment is not a sufficient condition for growth in productivity or wages, but it certainly is a necessary condition for each of those objectives.

If investment had been lower our economic performance on most indicators including productivity would almost certainly have been worse.

The government is absolutely right to try to create the climate in which firms have more money to invest; productivity, and therefore wages, will be higher if that policy continues.

Anonymous said...

More money for the shareholders more like it