New research: Cutting Corporation Tax will help the economy and boost Treasury revenue

Download the full report (PDF).

The most wide-ranging, comprehensive and up-to-date report on the issue of Corporation Tax, written for Conservative Way Forward (CWF) by Matthew Elliott, Matthew Sinclair and Corin Taylor of the TaxPayers' Alliance (TPA), reveals compelling evidence based on the experiences of Britain's leading international competitors that a cut in the rate of Corporation Tax would boost the economy and speed up the rate of growth in revenues raised in Corporate Tax by the Treasury. With large corporations such as Shire Pharmaceuticals and Krom River leaving Britain due to high tax rates, and shortfalls in public finances growing swiftly, the research is a timely proposal for improving the nation's economic standing.

By studying the economic records of 23 other high income developed countries, TPA researchers identified clear evidence showing that reducing Corporation Tax rates has such a positive effect on a country's competitive standing that cutting Corporation Tax by 10% would result in the rate of growth in revenue raised by Corporation Tax increasing by 5%. The range and scope of the research proves that the success of low Corporation Tax is not isolated to the famous example of Ireland, but has also been enjoyed by France, Austria, Belgium, Canada, Czech Republic, Denmark, Germany, Iceland, Japan, the Netherlands, Sweden and Switzerland. This evidence adds compelling weight to the calls for Corporation Tax cuts to help Britain shore up its economy in the face of the credit crunch, whilst dispelling the concerns of politicians worried about a resulting shortfall in tax revenues.

The full report can be found here (PDF).

Matthew Elliott, Chief Executive of the TaxPayers’ Alliance and one of the authors of the report, said:

"A cut in Corporation Tax would encourage companies struggling under the burden of high taxes to stay in Britain, and attract new investment which would drive up the amount raised in tax over time. Many British politicians look enviously at Ireland’s incredible economic record over the last ten years but worry that we can’t afford to replicate the corporate tax cuts that produced their success.  Our research shows that such fears are unfounded, that corporate tax cuts deliver such a big boost to investment and economic growth that tax revenues rise.”
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