back to article CBI calls for major overhaul to UK tax

The CBI today launched a scathing attack on the government’s corporation tax plans, claiming the economy will suffer if Chancellor Alistair Darling doesn’t radically overhaul the current system. In a new report, UK business tax: A compelling case for change, the CBI argued that corporation tax should be cut to 18 per cent over …

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Gates Halo

Stupid Pricks

Once again governments and hippies don't seem to understand that business is the backbone of any economy, if you lower the tax on businesses, more businesses can thrive, more jobs, less welfare and greater monies into the economy. Although the stupid welfare lead Labour government seem to think that businesses are an infinite source of cash, although as we can see by our non existent manufacturing industry this government and moronic "I'm a cleaner and a union rep" unions will eventually send this country into the ground.

He we see the current working model

Do

-- Up the Tax, companies won't mind

BusinessTax = BusinessTax + 3%

For each Company In Companies

If(BusinessTax > Company.AffordableCosts)

Companies.Remove(Company)

Next

While (Companies.Count > 0)

-- We will never exit the above loop... will we, well if so.. plan B

CivilianTax = CivilianTax * 20000%

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Go

Quadratic Regression

I have my own idea for a root-and-branch overhaul of the tax system.

The present UK tax system for both businesses and individuals is based around a stepwise linear regression, with discrete earnings bands taxed at different rates. It is currently possible to game the system by arranging assets so as to place you in a lower tax band than by rights you ought to be.

The reason for the banding system in the first place was that it approximated a quadratic regression while being simpler to calculate without the benefit of computers. Now that computers are ubiquitous, there is no need for the stepwise liner regression. It would be possible to apply a true quadratic regression to everyone's taxes, and there would be no way for the superrich to escape their duty to pay the subscription charges for living in a civilised society.

Obviously, such a radical change would have to be introduced in phases; probably over the course of several years with, say, n% of the amount calculated the "new" way plus (100 - n)% of the amount calculated the "old" way and n increasing year upon year until everyone's tax is calculated according to the new rules. My number one (I hope we'll have adopted the STV before then) is waiting for whichever political party dares introduce such a thing.

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Alert

Oh yeah, and .....

Oh yeah, and while we're at it, let's convince the whole of the EU to ban the import of any goods produced in conditions which would not be acceptable within the EU. Our strict laws on things like health and safety, environmental protection and workers' rights should not be an excuse for companies to outsource where they do not apply: rather, the same standards should be applied wherever goods are manufactured for import into the EU. (Such a move could never be made unilaterally by one country; but the trading might of the EU working together should be sufficient to ensure that change happens.)

Of course, this would drive prices up. Paying for things is generally understood to work out more expensive than cheating people out of things.

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Hypocrites

Not that the likes of Tesco pay much in the way of tax in the first place...

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Flame

Have the CBI ever said "OK, Corporation Tax is about right now, we'll stop complaining"?

Much like their standard line that paying people a living minimum wage will always drive them out of business, they always claim the tax they are paying is much too high.

I have little sympathy for either argument, if you can't afford to pay people properly and can't afford to pay a reasonable rate of taxation on your profits, you've not got a viable business, and you're not the high quality entrepreneur you think you are.

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Flat rate tax

All this buggering about with equations and shit just makes more work and everything confusingly blurred. Flat rate tax, end punitive taxes. More people actually paying tax rather than dodging it means you get more money even if the percentage is lower. Fordian economics, really. Last year's raise on beer actually netted them less money overall, because people avoided paying the higher tax in various ways.

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Coat

typical

Typical big business trying to maximise profit and have one law for themselves whilst the rest of us continue to get hammered by the tax system. Worst of all our Gracious Emperor Brown will probably end up capitulating and giving them whatever they want provided they donate generously to the Labour Imperium- I mean Party.

Mine's the one with the hammer and sickle on the back.

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Anonymous Coward

While we are at taxes

why not introduce tax for PM representation. If you want to vote, pay the tax. If you do not care, do not pay the tax. This way we would quickly get rid of all the new labour dumbasses elected by even dumber dole beggars.

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Flame

journalists need to stop buying the CBI propaganda line

Business will leave the country for two reasons.

1) High operating costs drive them out (part of which tax is a factor, but so has been the strong pound, cheap green field sites elsewhere and the larger skilled labour pool in developing countries).

2) Inadequate education system not providing numerate and literate employees, fractured transport system shrinking size of labour pool and making logistics more expensive. Health & Service (eg postal, electricity etc) costs adding too much to cost of doing business.

The Chancellor has to walk a balancing act between those to possibilities, but the CBI doesn't care one whit about (2). Once public services have been hollowed out for a generation by cheap taxes, businesses can simply upsticks and pull the same trick on other countries.

It's sad that a lot of otherwise smart people continue to believe that business naturally has the best interests of the country at heart. It doesn't. It has the best interest of its shareholders at heart and they're as likely American, Russian & Chinese as British.

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Paris Hilton

Evidence?

Does anyone actually think about these policies before proposing them? If it were true that tax dissuaded business from trading in a country, and that led to increased impact on the welfare state, every economy in the world would simply scrap all taxes to have full employment and then not need to provide public services, because we could all afford health care, etc.

The company I own pays corporation tax, but there are so many ways around it that it doesn't bother me in the slightest. In fact, it bothers me that I don't pay enough. I do actually want to contribute to other people getting a better education, for example. And education is related to taking people out of benefits and improving the general economy, not just the wealth of a few shareholders.

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Black Helicopters

How about that then?

"ordinary people would suffer from tax hikes which in turn could lead to spending cuts on public services."

We hear this line every time there's talk of ANY tax being reduced / changed, whether it's on cigarettes, booze, fuel, income tax, whatever.

Funnily enough, whenever there's any talk of spending cuts, it always seems that it has to come from the NHS/law enforcement etc, rather than MPs' expense accounts...

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The worker is the Backbone of any economy.

Bussiness is not the backbone of the economy. The Worker is. A worker that cannot afford your products and/or services means you have no business. A worker that cannot afford to get to work, means you have no business. A worker that has no health care services and gets ill, means you have no business.

Your business is more important than the Fire Brigade so they get less cash meaning they can't get to your business in time to put out that small fire before it bacame a raging inferno, means you have no business.

Your business is highly unpopular, becomes the target of fanatics they break in and smash it up. Where were the Police? Sorry sir your business was more important than paying taxes, means you have no business.

Businesses make the most money of any group of tax payers look at companies like BP for example, with absurd profits in the billions and the CBI wants companies like that to pay less?

SpitefulGOD, get down off your Right Wing soap box and smell what it is you're shovelling.

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Shut your anti-union face

Imbeciles who think paying a cleaner £5 an hour instead of £8 is the acme of sharp business should refrain from posting their senseless comments. Unions are required to stop incompetent managers from increasing profits by victimising the low paid.

Narrowminded reactionary thinking sells infrastructure for a fast buck leading to America with it's slave workers, prisons and criminal government and banking system.

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Let me guess.....

.....Their enire pitch is to move a greater share of the tax burden from those who do have money to those who don't.

Let me guess your voting tendencies spiteful...... <consults crystal ball>....I'm getting mmmm, rich, thick and full of clots..... oh yes the tories.

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Pirate

The great Alexander Tyler ...

"A democracy cannot exist as a permanent form of government. It can only exist until a majority of voters discover that they can vote themselves largess outof the public purse"

such wise words ... Whilst it may be a bit unPC, I can agree with the poster who suggested you should have a job before you can vote .....

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Coat

Politicians are like cheese..

...the more you have cheese the more you have holes.The more you have holes - the less you have cheese....

I really honestly don’t understand why the UK doesn’t follow the lead of Switzerland. It has one of the highest overall standards of living, and one of the lowest tax burdens.

It’s no surprise they effectively have competition between Cantons for tax.

It works something like this:

Federal tax – the base level everyone has to pay

Regional tax – a small bit in the middle

Local tax – up to the individual Cantons\cities to decide.

Some Cantons have higher levels of tax, others have regressive tax to encourage companies and people to come, settle and pay tax (like Zug). Yes, some people scam the system – like claiming to be resident in one Canton, but are shacked up with their other half in a more expensive place. Companies do the same – like having their “HQ” in Zug, but do most of their business in Zurich.

Oh yeah, I forgot – all the EU bullsh1t dictates a large percentage of tax regulation these days. Long gone are the days where any national Chancellor could *actually decide* on overall fiscal policy. So, we have a race to the tax and regulation “high water mark” – and all the inherent corruption/incompetence/bureaucratic scamming - instead of encouraging a more democratic and dynamic business and personal fiscal environment.

BTW, I’m *not* a neo-Thatcherite – I’m actually quite left-wing. Having lived in Switzerland – I saw that local communities can decide for themselves whether they want/need higher or lower tax. Just like they can have referenda on making or revoking laws. Quite democratic and socially just. A cynic would claim we’ll *never* have that in Europe as it would be the undoing of the Grand Experiment…

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Dead Vulture

@ Seán

No, no. Instead of paying the cleaners £6 an hour, they pay them £9 an hour. Only they halve the cleaners' hours.

This is exactly what happened at a company I used to work for. They switched cleaning firms in a cost-cutting measure. The new cleaning firm actually poached (by offering a higher hourly rate) a lot of staff from the old cleaning firm (who, due to losing a fairly large contract with a certain engineering firm, were laying people off). The offices and factory floors ended up being cleaned by the same people as before -- except that they had to work harder than before, and ended up bringing home less money than before.

Anyway, if you're sick of being pushed around by management, JOIN A TRADE UNION! and get pushed around by a shop steward instead!

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Who pays the Taxman

"TUC general secretary Brendan Barber added that plans to end what he described as "favourable tax rates for small businesses", could also lead to a backlash. "The CBI might as well hang a giant 'tax is for the little people' banner from its office windows," he said."

I'm a little surprised that Mr Barber has not realised that ALL tax is paid by the 'little people'. Corporation Tax, et al is simply added on to the selling price, which the 'little people' are stuck with. Only in the export market is this not so. At least for the population of this country. Unfortunately this drives up the price of exported goods, to the detriment of export sales. The ONLY solution is to cut taxes by reducing the amount of tax revenue that the government wastes. An impossible dream.

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Pirate

Who pays the accountants?

If it wasn't so cost effective to hire accountants to minimize a company's tax liabilities, the Tesco's of this world might have to pay their fair share and reduce the burden on the rest of us.

Perhaps we could have Accountancy Premium Tax, like Insurance Premium Tax? Charged at 2 million percent of the fees and the rest of us would never need to pay tax again!

Funny how it's never the accountants that get lined up for out-sourcing/off-shoring/down-sizing...

Now where's the icon for blood-sucking librarian vampire parasites? Oh well, pirates will do.

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Boffin

Ah

Ah , Lord Vestey rides yet again and again and again on the nag "Some one else should pay my share", that horse must be very tired by now and a mere skeleton of it's former self stuck in a very deep groove as they have been riding the very same argument or minor variations , since the early 1800's as a means to avoid paying for all those foreign wars and lining all politicians front and back pockets way back even then !

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Never yet met a business owner

where he would like the customer to send his accounts receivable to him, and his suppliers accounts payable to the governement.

I also have a strong recollection of here in Australia in the 80's the then President of the Liberal(ie Conservative) Party carrying on about the 'roonous' tax rate on business. He was at the time CEO of Elders/IXL a multi billion company - that was until the Socialist Bookshop in Sydney put up a huge poster showing comparative rates of tax vs income and it turns out Elders/IXL and most of the aus equivalent of fortune 100 were paying an effective tax rate considerably less than 10%. And I will never forget one company managing its affairs so that instead of paying capital gains tax on $20m from the sale of an asset of (which would have been about $10million at the time)actually recieved a 500k tax refund !

At the time I was paying an effective 40% (effective = total $ earned ./ total tax paid ) ---- It still burns !

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