Why "corporations will just run away" is a stupid argument

The narrative that corporations will just up sticks and leave the UK if The Labour Party increase Corporation Tax to 26% (still the lowest in the G7) is preposterous.

Here are five reasons

First - This corporation-flight argument relies on calling 26% "high" when it's actually low.

Second - It assumes that shifting huge businesses between countries is a costless exercise (or at least significantly cheaper than just paying a slightly higher rate of tax on their profits). Just imagine how much it would cost Rolls Royce to relocate their jet engine factory in Derby to another country. Is that really going to end up saving them money? 

Third - It totally ignores the fact that major corporations have not fled countries like the United States, Japan and Germany because of their higher-than-26% Corporation Tax rates (it's almost as if Corporation Tax rate is not the only determining factor in where companies are located isn't it?).

Fourth - It seems to imply that big corporations are a benefit to society, but if they pay such low rates of tax that they don't contribute to the cost of public infrastructure, services, educating their workforce, or paying their workers a high enough wage that they don't end up reliant on social security or charity (Tax Credits, Housing Benefits, food banks ...) ... then they're not beneficial are they? They're leeches.

Fifth - One of the favourite tactics of the low-tax fanatics is repetition of the argument that "the lower the tax rate the higher the tax take". This is wrong on two fundamental levels. It's contradicted by reality because the Corporation Tax take has flat-lined since the Tories slashed Corporation tax from 28% in 2010 to 19% now, even though corporate profits have been rising. Then there's also the fact that this over-simplistic "lower tax = higher tax take" idiom completely breaks down when the rate approaches zero. I've tried to get low tax fanatics to explain how a 0% tax rate would result in the highest possible tax take, but none of them seem prepared to even try and answer.

Labour's plan is actually really good

Labour's Corporation Tax policy is actually pretty good because small and medium sized businesses will pay less corporation tax (21%) than the giant multinationals (26%).

This is a very good policy because it allows small businesses and entrepreneurs to actually compete with the giant corporations (which obviously benefit enormously from the advantage of economies of scale).

Differential corporation tax rates are actually a very good idea from an economic perspective because they support infant industries (some of which become the giants of the future) and because they promote economic competition.

The Tory plan is ridiculous

The Tory policy of reducing the UK Corporation Tax rate even further (to 17% on their current plans or even lower if they do the "no deal" Brexit strop thet're already planning for, then turn the UK into a corporate tax haven) is ideologically driven lunacy.

We've already got the lowest level of Corporation Tax in the G7 and we've also got the lowest level of infrastructure investment in the developed world (at just 1.7% of GDP), yet the Tories are on about cutting Corporation Tax even further, and even further reducing the tax take, so that big corporations have to contribute even less towards the infrastructure and services they rely upon in order to generate their profits.

Cutting the Corporation Tax rate from 28% to 19% has cost the country £9.7 billion per year, and their plan to cut it even further to 17% is set to cost the country another £6.8 billion per year.

The Tories tell us voters that we have to tighten our belts because of austerity, but then they're handing whopping great tax givaways to their corporate mates.

Either we're broke and we can't afford things, or we're awash with enough cash to give loads away. We simply can't be both simultaneously can we?

The choice

One of the biggest significant differences between Labour and the Tories at this election is on economic policy.

Labour wants major corporations and the super-rich to pay their fair share so that the country can invest in infrastructure and innovation for the future prosperity of the country (like Germany does).

The Tories want to continue giving tax giveaways to the corporations and the super-rich and cutting back on infrastructure and innovation spending in order to cover the £70 billion they want to stuff into the pockets of their super-rich mates.

The choice is between a costed Labour manifesto with a strategy of investment for the future (which will benefit us all in the long-term, even the big corporations) or an uncosted Tory manifesto outlining a plan for asset stripping and national decline.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

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The Tories have crashed the economy

Since 2010 the Tories have created way more public debt than every single Labour government in history combined.

It doesn't matter which way you measure it (in £billions or as a % of GDP) they've loaded up a fantastical amount of debt, and despite their 2010 election promise to stop adding to the debt mountain by May 2015, the deficit is was still over £50 billion in 2016-17 and their manifesto says they won't be getting rid of it until the mid 2020s!

Given this unprecedented borrowing splurge, you might have thought that the Tories might have invested some of it in infrastructure and innovation to develop the wealth of the future so that the country might be able to one day pay it off, but no!

What they've actually done is slash investment back as part of their ideological austerity drive, so that we have one of the lowest levels of investment anywhere in the developed world at just 1.7% of GDP (around half the average).

They've also exacerbated the situation by creating the worst slump in workers' purchasing power since records began (a wage slump matched only by crisis-stricken Greece anywhere else in the developed world).

The result of course has been almost an entire decade of economic stagnation. 

Between 2012 and 2016 the Tories hid the flatlining economy quite well by overseeing the largest immigration influx in UK history. In 2015 Theresa May set the all-time net immigration record of 336,000 in a single year (equivalent to a city the size of Coventry).

This immigration inflow masked the flatlining economy as the Tories cheerily pointed to increasing GDP figures to brag about what a great job they were doing, without bothering to explain to the public that almost all of the extra economic activity was accounted for by the increasing population.

To those of us who understand how the economy actually works the idea of slashing investment and crushing down economic demand with the worst wage slump in recorded history in order to hand vast tax giveaways to the tiny super-rich minority looks like an absolutely awful idea, but somehow this has been presented as the Tory "long-term economic plan", and somehow millions of people have been conned into believing that there is no alternative to doing things this way.

In the wake of the Brexit vote three things have happened. Firstly the flow of migrants has slowed down significantly, meaning the Tories' fake immigration-backed economic recovery is faltering;secondly an awful lot of businesses have put their expansion plans on hold, or even set about reducing their UK operations in order to focus on the bits of their business that will remain in the EU Single Market; and thirdly workers have seen the value of their wages eroded away as the slump in the value of the pound has lead to increased inflation.

The result of this combination of factors is an anaemic growth rate of just 0.2% (it would surely be negative if the impact of non-EU migration was discounted), the joint worst in the G7.

So next time you hear Tories bragging about their wonderful economic track record, remember how their fake immigration-boosted "recovery" worked, and how the wheels have totally fallen off it since David Cameron lost his astoundingly reckless EU referendum gamble.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

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The party that continued arming Saddam Hussain after Halabja is moral high-horsing about chemical weapons!

There is nothing quite as hypocritical as the faux outrage of Tories over war crimes and human rights abuses.

In the wake of the Idlib poison gas incident Boris Johnson and many other Tories started immediately peddling the Syrian opposition narrative that the gas came from chemical weapons bombs dropped by the Syrian government. The Syrian government denied responsibility saying that the gas leak occurred when they bombed a terrorist munitions factory that had apparently been manufacturing chemical weapons.

Without an official investigation it's impossible to know which version of events is true, but that didn't stop Boris Johnson immediately adopting the evidence-free narrative that the Syrian government were to blame, and then self-righteously pushing for sanctions against Russia at the G7 as if the use of chemical weapons (even if unproven) is some kind of red line the Tory party will not tolerate.

Oh how different things were back in the 1980s when the Tories continued arming Saddam Hussain's Iraq, after the 1985 UN embargo on selling weapons to Iraq, and even after the proven use of chemical weapons in Halabja killed 5,000 people.

Back in those days Saddam was considered to be a useful British ally who fought numerous proxy wars with Iran on our behalf, so as far as the Tories were concerned, his use of chemical weapons at Halabja was perfectly excusable.

The Arms to Iraq scandal was absolutely huge in the 1990s. Four directors of the Matrix Churchill machine tooling company were put on trial for supplying equipment and knowledge to Iraq, but the trial collapsed spectacularly after it was shown that the Tory government had actually advised the company on how to sell weapons to Iraq!

After the collapse of the Matrix Churchill trial the Scott Report was commissioned, and when it came out the Tory party held a vote to totally exonerate themselves of any wrongdoing which they won by 320 votes to 319.

So the Tories advised a British company to bust UN sanctions by selling weapons to a tyrant who definitely used chemical weapons against his own people, then voted to exonerate themselves of any wrongdoing, and now they're moral high-horsing about an unproven use of chemical weapons by the Syrian government.

"Ah but all that was a long time ago" I can almost hear the Tory apologists whine, "move on", "forget about it", "stick to the present" ...

Well even this appeal for historical amnesia doesn't work as an excuse. On the very same day as the Idlib chemical gas incident Theresa May was in Saudi Arabia grovelling before the Islamist tyrants who rule that barbaric nation in order to convince them to continue spending £billions on British weapons, even though the parliamentary affairs select committee had openly admitted that the Saudis are using British weapons to commit war crimes in Yemen.

If we look not so far into the past we see a Tory government actively supporting a UN sanctions busting drive to sell weapons to Iraq, even though Saddam Hussain had just gassed 5,000 Kurds to death at Halabja.

If we look at the present we see a Tory government supplying £billions worth of arms export licences for Saudi Arabia, despite a parliamentary acknowledgement that the Saudis have been using British weapons to commit horrific war crimes in Yemen.

Whichever way you look at it the Tory party reeks of hypocrisy, and anyone who is aware of their past policies in Iraq, or their present policies in Saudi Arabia, surely can't pretend that such hypocrisy is acceptable.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

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