IEA - Labour’s plan for higher business taxes “a big step backwards”
Reaction to Labour's plan to increase taxes on business
Commenting on Labour’s funding pledge via corporation tax hikes, Julian Jessop, Chief Economist at the Institute of Economic Affairs, said:
“Labour’s plan to raise the main rate of corporation tax from 19% to 26% by 2020 – reversing almost all the cut from 28% in 2010 – is a big step backwards.
“They are trying to sell the policy as rebalancing the tax burden towards the ‘rich’. But the reality is that everyone benefits when companies are encouraged to invest and create jobs. Indeed, big increases in tax rates rarely translate into big increases in tax revenues, because they undermine growth and incomes for all.
“What’s more, with many other countries now planning to cut corporate taxes, Labour would make the UK a much less attractive location for global businesses. This is exactly the wrong signal to send as the economy prepares for Brexit.”
Notes to editors:
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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.
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