Earlier this week the CBI said that UK companies are planning to flee the UK because of our increasing tax burdens. John Christensen and I have replied in the letters page of the Guardian.
The data we have used is all derived from UK national statistics and data published by HM Revenue & Customs. It is consistent with data used by most economists who work in the taxation area, and shows that against expectation government corporation tax receipts are not falling significantly. But it offers an explanation which I have not seen offered at any conference that I have attended on this issue. Our data shows that profits as a share of GDP are rising, and that constant tax revenues are happening only because tax paid as a proportion of profit is falling as fast, if not in proportionate terms faster, than profits are rising.
The outcome is simple. UK companies aides are getting all the benefits of operating in a vibrant economy, stimulated by tax spending but want to pay nothing towards the benefit they obtain from doing so. They do instead wish to pass that burden to others, and governments such as those in Jersey and Ireland are happy to assist them to do so.
There is, therefore no economic substance to what the CBI is saying. The substance in their argument is greed. And that is the antithesis of corporate responsibility.
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I have been following the CBI’s argument and that of Lloyds of London regarding companies fleeing the UK because they deem corporate tax to High.
My first point is that the biggest companies in the UK pay nothing like the 30% they are supposed to pay.
According to the research I conducted for Attac and the Tax Justice Network in a submission to the States of Jersey Scrutiny Panels on the Proposed Income Support Scheme relative poverty will grow due to the move to 0% corporate tax and other fiscal policy changes
which will impact on the lower socio-economic classesmore that any other.
Jersey also has no plan B if their incoming fiscal changes are deemed un-compliant by the European Unions Code of Conduct on Business Taxation unit.
therefore there only seems to be to outcomes. 1: More poverty, 2: Jersey becomes bancrupt.