Chart of the Day: do British companies need another tax cut?

Our rate of corporation tax is low enough. With what I see, companies will make more profits without the benefit for consumers. Take the energy sector, their profits are in billions and the poor household is suffering.

Corporation tax should be zero!

We will attract investment from all over the world are exporters will have the spare money to under cut the competition. At last we will create real jobs, employing more and more people. However, his would be counter productive because there are too many lazy people who just don't want to work and we would need to import the people to do the work and or earnings inflation would go through the roof.

So I feel we should keep reducing corporation tax but we need to cut benefits even more and spend that money on forced education for the lazy so that we some day might be able to have zero corporation tax.

Yes corporation tax should be cut, particularly for small companies that can quickly employ new people. In addition the company element of NI should be cut to zero for companies employing less than 30 people. We might then see very significant hikes in employment.

Businesses (especially corporates) in the UK are sat on larger cash reserves than ever. Whilst the media constantly focuses on the Banks not lending (money that they don't have) everyone has failed to see that the failure of business to invest is what is currently hurting out economy.

Another CT cut will not help this, the cash will just be slung on the pile. Cut income tax which will boost consumption which will boost confidence.

Asking a trade union organisation about such matters is hardly likely to elicit a rational response on such matters as corporate tax. Countries with low rates of tax have often been high growth for the simple reason that it is worthwhile for enterprising individuals to create companies and work hard. eg Hong Kong and Singapore. The problem for the UK is that the taxes raised are most often squandered ie they produce NO economic growth or benefit. The problem is the "something for nothing" mentality of swathes of the British public. In the new world we now face, this has to change.

We need to get rid of the short-termism prevalent in British business, so a cut in Corporation Tax will simply let companies boost their dividend, rather than investing in their business for the future.

If you’re going to cut anything, cut income tax, or make any corporation tax cut dependant on business investment.

Anon 1 has clearly never founded and run a company if we eliminated corperation tax to nil for companies employing less than 30 people and genuinly made less costly bank loans available [free of the very costly arrangement fee for the wriiting of one letter] more small companies would take on extra staff and would expand. It is also true that many companies are sitting on a very large cash pile, however after the the complete chaos and massive expansion of the public sector by the last labour government this is hardly poor management, just a degree of caution in view of the continued chaos created by the EU and every member countries sparsity of adequate political leadership let alone good leadership. As for the TUC they are a pointless drag on the income of the very people they claim to represent, they were past their use by date 20 years ago.

S-ville

I would reduce income tax but this might increase personal saving (which is not bad in the long-term) and increase imports because people buy more Ipods. However, lowering income tax is far far better than lowering VAT.

To control sort term activity you should do it through Capital Gains tax and tax loop holes. Not Corporation tax.

Lowering Corporation tax is the best way to encourage proper investment. Companies need to have cash piles in times of uncertainty they would be mad not too!

The CBI should be listened to. More should be done to help Companies and rebalance the economy, at the same time:-

a) continuing to improve our woeful infrastructure which is also holding back progress.

b) improving education and training

Lowering income tax or VAT generally at this time is the crazy economics that got us into this mess to start with, and will just suck in more chinese imports.

John

The problem is the school kids often dont want to learn, or be seen to be working. An ethos of "do as little as you can get away with" is endemic. Teachers dont have a particularly easy job either as it resembles "crowd control" not teaching. Waste-of-space parents with attitude problems dont make it any easier. The result is that most coming out of the education system dont have the basics in place and are unemployable. Our education system has steadily been downgraded over the years; even undergraduates are needing remedial learning to bring them up to a reasonable standard. The public education system is a great consumer of taxes paid but the return on investment is pitiful.

Interesting that we see Honk Kong and Singapore referenced here. Both have higher Gini coefficients than that of the UK i.e. thet have greater disparity of wealth between the top and the bottom. Studies have shown that the greater the disparity in wealth distribution within a society the greater the danger to society. A quick look through history proves that. Whatever is done, be it reducing corporation tax, income tax or VAT, it must address two fundamental issues with UK society: the need to great jobs and wealth for the benefit of all in the UK; and the need to ensure that society is seen to be fair from the very top to the very bottom. What the last 40 years has shown us is that society has become more inbalanced and less fair to all and that should be a wake up call to everyone who wants to see a strong and vibrant UK economy.

p.s. what about standardising tax rates for both corporations and individuals, the so-called flat tax argument.

Keith Snell

a 30 employee cut off for zero rate income tax would create massive unemployment as companies would cease expansion at this level or out sourcing production, with companies 30+ laying off staff to reach this level.

Finance remains cheaper than its ever been - base rate 0.5%, Libor 1%. I've not yet come across a sound business with a well writen business plan thats been turned down for credit. Problem in UK is that Banks have rightly raised standards, SME's have not and with a large number financially iliterate and loathe to pay for a good accountant.

Correction CT not IC.

Truffle Hunter,

You paint a depressing view of our society and education system. We need to move forward with more experienced leaders operating in the national interest with innovative solutions to rebalance our economy and restore our national pride and culture. That certainly has not happened for many many years unfortunately.

Personally I think the extremely adversarial political system is partly to blame. Continually rubbishing peoples statements and views as a point of principle whether they believe right or wrong may be good for the professional politicians but I think it is a bad way of running a country in crisis and creates polarisation and demotivation.

Anon1, the base rate is cheap, but the banks have been screwing customers. 7 or 8% over base, whereas the norm used to be 4% over base, so profiteering.

And oh, RBS are also being screwed by the govt, (not that Osborne Cameron will admit it) they are paying 12% on their loans, a usuary rate, a rate they cannot get anywhere else and they will cling onto that for as long as they can, because of the income and the (undue) influence they wield through it..

Agreed that the banks have little free money to lend, they are, like most companies hoarding what they get against the brick wall coming, when Greece gets fed up with the conditions and loss of liberties and Merkrazy to take a hike.

The scenario is different from the 30s, but the intent appears to be the same, total domination.

No, the employment tax NI on Companies needs to be cut, why should a Company pay tax to the Government to employ people?????? Maybe the Government should pay tax to the Companies for employing people..... certainly then the country might not be the future Greece..... and we would have less unnecessary Government.

What about giving tax breaks to corporations but then take away the tax loopholes that loose us hundreds of billions each year. Enough to cure much that ails us. At least it would be above board then.

Maybe we should compensate by taxing the six and a half million who are out of work or part time, or the millions of low paid. Maybe we could also get those evil pensioners who we think are bleeding us dry waisting the money on food and heating.

The way things are going they will need to pay them to employ people by the time they've given jobs to old people who should have retired, all those kicked off the disabled list, the uneducated, the unemployable kicked off benefits and the downright unwilling who just don't want to be there. Ah the clay of our future.

Don't cut corporation tax, scrap all business and private rates, and all national insurance contributions all this taxation should be moved over to VAT it will have the effect of making imports pay there fair share of the costs of running the country and reducing the costs being heaped at present onto the cost of our manufacturing so hopefully we can compete again. ( And go back to work )

Corporation tax is paid on profits that's fine. Stamp duty should also be abolished it is not a tax on profit, as it applies to housing, it actually means most people borrow the money to give the taxman, madness, I was hoping the coalition might have been bold enough to completely simplify our tax system and go back to basics, Tax above average, Tax profits, Tax non basic purchases. Don't put the burden of the state onto our industry and workers wile allowing cheap goods to flood in to temporarily keep those workers happy. Wake up we will all be unemployed with no money to buy cheap anything.

Rant over Peter

I completely agree with VAT. It should be taxed far more because it does not encourage investment it encourages spending. We cannot supply all the demand created by households already. That is why in every month under Labour we imported more than we exported. This is what we need to change.