Reaction to Labour's plan to increase taxes on business
“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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Relevant IEA publications
In 2016 the Institute of Economic Affairs published ‘Why corporation tax should be scrapped’, calling for capital taxation to be brought into the 21st century. To download this please click here.
In 2012 the Institute of Economic Affairs published ‘Aligning corporation tax and income tax’, explaining why the main rate of corporation tax should be aligned with the basic rate of income tax. To download this please click here.
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