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Anti-Cuts March 26th March

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Thursday 31 March 2011 9.03am
Ivanhoe wrote:
Dee Dee: you're conveniently ignoring the number of companies who are still leaving the UK.

No doubt there are companies leaving the UK for tax reasons (we are competing with other countries so if someone in Eastern Europe for example offers better tax breaks then companies will look to locate there) but others are leaving for reasons other than tax as well (Cheaper labour etc). Companies will always leave for a whole raft of reasons-the whole point is that the lowering of the CT rate makes the UK a more attractive place to do business and encourages companies to come here rather than leave. If the rate was higher there would be a lot more companies leaving taking UK jobs and tax revenue with them
Thursday 31 March 2011 12.10pm
All of you are very worthy and may I say in my own defence that I do not want to imply that I know everyone in the entire country and his/her circumstances...I know a cross section of people in the UK and I dont think anyone is totally immune from the cuts, be it domestically, professionally, or any other way. It's just - if you're in a hole stop digging. And we are in a hole whatever anyone says. And whether this is because of this government or another, this world crisis or another, these greedy bankers or those careless economists, foolishness or hubris, no longer matters. That's past, and we have to look forward and try and stop The Ship sinking altogether and all together.
Thursday 31 March 2011 12.42pm
The problem is that cutting like this isn't stopping digging: it can be digging even faster. People who would have been paying taxes are now unemployed: they're not contributing to the tax base, but are added to welfare payments. The work that they did still needs to be done, so it's farmed out to private companies (that's the whole purpose of the cuts, the privatisation of public services). This won't, in the long run, cost less.

In addition, money that people would have earned and spent isn't there, with a depressing effect on the economy, which will lead to further job losses and further decline in the tax base and increase in payments to welfare.

The next step would be to try to reduce the welfare payments, which usually involves demonising the unemployed as feckless, workshy layabouts. The usual libels. Perhaps a single edge case, where an individual has received an unusually large payout can be used to deny more modest payments to thousands of others.

What's taking place won't reduce the deficit, it will increase it. The current government have taken a recovering economy and driven it straight into recession again.
Thursday 31 March 2011 1.40pm
grangousier whilst some of your thoughts are relevant the idea of reducing the public payroll is 2-fold...1 do the work that needs doing but with fewer people (productivity improvement from a notoriously unproductive part of the economy - generalisation but often true) and secondly whilst those people will not be paying tax and spending in shops they will also not be costing you me and eveyone else their monthly salaries and benefits packages...which are these days apaarently easily equivalent to the private sector.

The economy needs to be rebalanced away from consumption (dare I say it financed in large part by the financial sector) and more towards production...it needs to happen and that's why the public sector needs to contract as part of the national economy.

As for greedy bankers there is a very small number of extremely well paid people in the sector, much like there is in football...they are the stars of their industry...and they are indeed paying an awful lot in tax already. Sure they can afford it but you can't demonise these people forever (especially when the real culprit for the defecit is government overspending for the last 10 or so years). The money "lent" to the 3 banks in the form of an equity purchase is close to breakeven...so we as a nation will be getting our money back.
Thursday 31 March 2011 11.22pm
dee dee wrote:
the whole point in reducing the rate of CT is to make us more compeditive internationally

Well quite, for an example of what a Jolly Good Idea this policy is, we need only look at how well Ireland is doing with its corporation tax rate of 12.5%, compared to struggling, near-bankrupt Germany, whose companies are fleeing its corporation tax rate of 31%.

Oh, hang on... :)
Friday 1 April 2011 7.53am
Being JDC there are many reasons why a country attacts investment not just tax There are all sorts of other economic and social reasons as well but tax policies can be used to encourage investment and that is what a lower CT rate can do.

I think you will find Irelands problems are not due to their low CT rate and that is why they continue to keep it low to keep companies there and to try and get futher investment to help them out of the hole they are in.

Germany is also more complicated -Germany has invested fortunes in their infrastructure and manufacturing industries when the rest of us have been negleting ours and have far better production and lower costs that mean their economy is in a far better position to cope with a higher tax rate. There are also all sorts of economic, demograpic and geographic reasons why Germany has a better chance of attacting investment than say Ireland.
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