Cut Corporation Tax Now

Philip Booth writes for The Wall Street Journal

There are no votes in reducing corporate income taxes. Most Britons believe such taxes are paid by "companies" and that the elite fat-cats running said companies deserve to be taxed at punitive rates. Some do not even think companies should be allowed to earn profits. This week on the BBC's flagship program Newsnight, presenter Jeremy Paxman suggested that if water companies did not take profits, they would have extra money for investment and reducing prices.

Even investment guru Warren Buffett seems confused on corporate taxation and profit. He claims that taxes on the rich should be raised because "the wealthy" such as himself only pay 17% tax on all their income. The basic error here is that Mr. Buffett pays a 17% tax rate on dividends only after the company he's investing in has paid its profit taxes first. Thus investors are taxed twice, in the U.S. as in Britain—once on their profits and again on the dividends paid out on those profits, which are the reward for investment and risk taking.

Ultimately, corporate taxes fall not just on fat-cats in boardrooms, but on real, average people—the 99%, if you will, such as potential pensioners who rely on their investments for a comfortable retirement. But the cost to said pensioner is currently so well hidden in the U.K. that most people do not realize they are paying.

Read the rest of the article here.

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