By Julian Jessop (IEA)
Plenty of taxes and regulations that affect the business community are long overdue for reform. Unfortunately, the Conservative Party and Labour Party today have dodged tackling the big questions around their future, and have instead proposed some counter-productive policies that may actually damage the economy.
While both parties are right to target business rates as an area in need of reform, the corporation tax system is also increasingly out of date. The Conservative’s plan to postpone further cuts to corporation tax, and indeed Labour’s pledge to reverse the cuts, both ignore research showing more than half the burden is borne by workers; furthermore, corporation tax remains an inefficient way to raise government revenue and has a negative impact on investment and entrepreneurship
In addition, the renationalisations proposed by Labour not only come with a hefty price tag, but would also create state monopolies in key sectors of the economy, reducing competition and driving more innovative providers out of business.
Further Reading - https://iea.org.uk/publications/why-corporation-tax-should-be-scrapped/