Hiking corporation tax would be ‘illogical and counterproductive”, says IEA expert
Mark Littlewood, Director General at free market think tank the Institute of Economic Affairs, responded to reports that the Chancellor Rishi Sunak is considering raising corporation tax
“After spending billions supporting businesses over the course of the pandemic, punishing them now with a tax hike would be illogical and counterproductive. Corporation tax is one of the most inefficient ways of raising government revenue and amounts to a tax on wages, consumers and investment.
“The UK economy is already at or close to its maximum taxable capacity. A hike in corporation tax would slow down economic growth and may even reduce revenue for the Treasury. The government should instead focus on boosting economic growth by relaxing regulation and reducing the tax burden on businesses. This will be the way to begin to balance the books.”
Notes to editors
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To read IEA report, ‘Why Corporation Tax should be scrapped’, click here.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
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