Finance Minister’s Plan to Save U.K. Economy: Undercut Everyone With a Rock Bottom Corporate Tax Rate
- Posted on March 23, 2012 at 12:05pm by
Becket Adams
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During his budget statement on Wednesday, British finance minister George Osborne introduced his plan to save the U.K. economy: win over major businesses by slashing the corporate tax rate to 22 percent.
The tax cut is part of a larger effort to deal with the U.K.’s struggling economy.
“Together, the British people will share in the effort and share the rewards,” Osborne said. “This country borrowed its way into trouble, now we’re going to earn our way out.”
British finance minister George Osborne (Photo source: AP)
Economic growth this year will be 0.8 per cent, up from a previous forecast for 0.7 per cent, according to the Office for Budget Responsibility.
“By 2014, Britain will have a 22 percent rate of corporation tax,” Osborne promised.
He touted the target tax rate as “a headline rate that is not just lower than our competitors, but dramatically lower: 18 percent lower than the US; 16 percent lower than Japan; 12 percent below France and eight percent below Germany,” writes The Washington Examiner’s Joel Gehrke.
“All of these tax reductions will help win business for Britain,” the finance minster told Parliament yesterday. “From next month, Britain will have a corporation tax rate of just 24 percent. And we will continue with the two further cuts planned next year and the year after. So that by 2014, Britain will have a 22 percent rate of corporation tax. The biggest sustained reduction in business tax rates for a generation.”
He continued, saying the tax cut would act as:
An advertisement for investment and jobs in Britain and a rate that puts our country within sight of a 20 percent rate of business tax that would align basic rate income tax, the small companies rate and the corporation tax rate.
Osborne is confident that the measure will work.
“Not only will this help stop premium British TV programs…being made abroad, it will also attract top international investors like Disney and HBO to make more of their premium shows in the U.K.,” Osborne said.
Osborne said Britain was likely to avoid a technical recession, officially defined as two consecutive quarters of negative growth. In the last three months of 2011, Britain contracted by a quarterly rate of 0.2 per cent. He outlined a range of measures he hoped would kick-start growth. A cut in the corporation tax rate by a further percentage point in April takes the rate down to 24 per cent. By 2014, he said the rate would be 22 per cent.
The Associated Press contributed to this report.
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youdidthis
Posted on March 24, 2012 at 12:05pmhow about no income tax…
govt would shrink to its needed size.
govt already taxes everything.
cut the size of the dam govt and will be prosperous.
Report Post »TangLaoYa
Posted on March 24, 2012 at 10:44pmI don’t know where you do you reading, but it seems you are particularly down on income tax. My sources believe that all taxes are equallly burdensome on society; that it doesn’t matter which tax is used but it should be kept to a minimum. May I ask you to name your favorite authors?
Report Post »Robert999
Posted on March 23, 2012 at 10:28pmThese British politicians call themselves Conservatives, but they are more liberal than Obama. They have not done away with the socialistic health service (a lot more socialist than Obamacare) and keep all the socialist government programs from all the Labour governments since WWII. The UK is not a free country.
Report Post »lukerw
Posted on March 23, 2012 at 7:51pmAccording to the ‘Laugher Curve’ a Tax of 17% generates the Maximum Revenue… and anything else Less, relative to the Increased or Decreased Rate!
Report Post »Micmac
Posted on March 23, 2012 at 1:51pmIf the corp tax decreases, but the govt still spends spends spends, then personal taxes will need to be raised. Remember, the British medical system (their NoBamaCAIR) is the second largest “business” in the world.
Report Post »Cavallo
Posted on March 23, 2012 at 2:40pmYou’re right. It will take more than just corporate tax reductions to solve their economic woes. It will take a complete overhaul of government policy and expendatures, lest they collapse under the weight of their own bureaucratic nightmare.
Report Post »AvengerK
Posted on March 23, 2012 at 4:57pmIt’s a great first step to attract business to the UK especially when the U.S. is so hostile to business under Obama. But entitlements must be addressed also. Cost cutting must accompany this type of cut or you’re not solving the problem that got you there. One characteristic the British do have is they “do austerity” very well. They’re a culture that can tough it out when they need to.
Report Post »Right_on_the_Left_Coast
Posted on March 23, 2012 at 7:02pmU.K. politics is as cryptic and sneaky as American politics. When one tax gets cut, another goes up unannounced. Businessmen in the UK are crying foul over this story. George Osborne wasn’t totally honest about the coming changes to the corporate tax landscape:
http://www.thisismoney.co.uk/money/news/article-2118631/BUDGET-2012-Businesses-save-2m-day-corporation-tax-cut–face-1-3bn-raid-door.html?ito=feeds-newsxml
Report Post »vox_populi
Posted on March 23, 2012 at 1:41pmGreat idea – race to the bottom! But you’re going to need more than low corporate tax rates to bring businesses back; better get started on cementing a permanent underclass who can work 14-hour shifts for a handful of coins, then go back to their factory-dorm to pass out until their next slave shift.
Report Post »Briggston
Posted on March 23, 2012 at 1:50pmNo that would be the peoples communist utopia of China where the very liberal Steve Jobs who cares so much about the workers plight makes his i-pods and i-pads in a communist sweat shop
Report Post »Briggston
Posted on March 23, 2012 at 1:52pmNo that would be the communist utopia of china where steve jobs the liberal who cares so much about the plight of the worker manufactures his i-pods and ipads in a communist sweat shop. HYPOCRITE
Report Post »Cavallo
Posted on March 23, 2012 at 2:03pm@Vox, What exactly is your beef? Is it that businesses exist at all? Or that they are not tightly controlled enough by a centralized authority? Or that they are allowed by a controlling centralized authority to seek production elsewhere?
Report Post »Jaycen
Posted on March 23, 2012 at 2:44pmOh, VOX_POPULI, are you trapped in a Marxist emotional argument? Aw…
See, Vox, most people are more than just one label. I’m not only a “Consumer”, but I’m also a “Producer”. Guess what? I’m also a “Property Holder”.
So, your brutally over-simplified view of reality doesn’t really hold for most people. Your class warfare nonsense doesn’t gain any traction, but hey, you can troll internet blogs and try to rile people up by being a douche!
Good on ya!
Report Post »russelleon
Posted on March 23, 2012 at 1:29pmWow, I’m shocked, somebody actually has a non-self serving idea in government.
Report Post »Itsjusttim
Posted on March 23, 2012 at 12:49pmMoney, money, money, and that’s all they dream about is money and power.
Report Post »Itsjusttim
Posted on March 23, 2012 at 12:46pmWell but of course, the world is all about that love of money.
Report Post »Cavallo
Posted on March 23, 2012 at 1:54pmYou do understand what money is? Money is just a representation of labor. It is a tool to facilitate the ease of the exchange of labor. The more tightly money is controlled by a central authority, the more it is seized by force, the less free the public is as the thugs in power seek to dominate their lives and labor.
Report Post »Jaycen
Posted on March 23, 2012 at 2:45pm@Cavallo
God bless you for your common sense. You must be a student of the Austrian School.
Report Post »MAMMY_NUNN
Posted on March 24, 2012 at 4:35amCommunism doesn’t work because people like to own stuff.
Report Post »Frank Zappa
IMCHRISTIAN
Posted on March 23, 2012 at 12:46pmGlad somebody has some smarts in really lowering corporate rates.
Report Post »kevinthewriter
Posted on March 23, 2012 at 12:42pmKeep in mind that corporations do not pay taxes….people do. The corporate taxes are embedded in the purchase price. So, in reality, we are being double taxed. We need the Fairtax (H.R. 25 and S.13) enacted. 0 corporate taxes, 0 income taxes, 0 taxes on the purchase of basic necessities, and no more I.R.S. It eliminates a political bargaining tool for politicians, brings back American jobs, and makes tax payers out of tax evaders and illegal aliens. I’m a middle class working dad and I strongly believe the Fair Tax will put our country back on the right path. (along with voting out the communist in the white house) go to fairtax.org for more info.
Report Post »happ77
Posted on March 23, 2012 at 3:23pmI’m with you Kevin, Fair Tax.
Report Post »If I had a dollar for everytime I said we pay the corperate
tax I’d be in the 1%. No corporate tax = no unemployment.
maxedout
Posted on March 23, 2012 at 12:40pmWhy is the Blaze telling me I’m not logged in, when in fact I am.
Report Post »HKS
Posted on March 23, 2012 at 12:43pmIt does that to me also from time to time. They must have a glitch.
Report Post »Micmac
Posted on March 23, 2012 at 1:47pmDoes it to me, too. So I always save my post before posting it. If it phails, I just log out and back in…very annoying.
NoBama 2012
Report Post »HKS
Posted on March 23, 2012 at 12:39pmNever work there, to simple for a liberal society to understand.
Report Post »Mark0331
Posted on March 23, 2012 at 12:18pmSmart move…but the ‘lefties’ will fight it tooth and nail, you know the old ‘Corporate greed’ mantra… April 1st of this year our own US corporate tax rate will be nearer to 40%, highest in the world. Barry O just fiddles away oblivious to our own countries demise…Corporations reinvest their money through hiring and expanding/growing their business…but Barry O doesnt’t even know this basic maco economic 8th grade business lesson.
Report Post »bhelmet
Posted on March 23, 2012 at 12:16pm1 good common sense start, but until spending is cut – a waste of time. Same goes here in the US.
Report Post »martinez012577
Posted on March 23, 2012 at 12:15pmSmart man. If we could get a man to follow his foot steps and under cut the Eurozone and then end the overseas wars, and then end the FED we might be getting somewhere.
Report Post »hi
Posted on March 23, 2012 at 12:14pmMake it zero in the US. Bring the jobs back!!
Report Post »mcsledge
Posted on March 23, 2012 at 1:41pmUnfortunately, if you made it zero, the jobs would still be exported. Businesses operate to make a profit. To do this, one tries to increase sales and decrease cost. The cost of labor (especially associated with unions) well exceeds the cost of labor in emerging markets over seas plus the cost to ship it to the products back to America. As a result, production is not likely to return to America.
There is no golden answer to this problem. The world is narrowing the gap of intelligence, industry, etc. between itself and America. If people were to bite the bullet and buy only American made products, the jobs would come back. Unfortunately, more and more Americans are becoming more and more progressive/liberal and have lost any pride in America. You can’t count on these people to help the cause.
Report Post »1cooldaddyo
Posted on March 23, 2012 at 1:54pmMCSLEDGE,
You have a point about overseas labor costs. However, I imagine eventually the overseas workers will one day say to themselves “We’re building iPods because American workers would want $100 a day to do the same work, but we’re only getting $2 a day. Wait a minute…Hey! Boss! We need to talk about my compensation.”
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