Re: HOW IT WORKS *
"+2% Change in Greek corporate tax rate (to 28 percent), required by eurozone creditors for economic recovery
-2% Change in UK corporate tax announced in budget (to 18 percent), required for British economic recovery"
Percentage changes are irrelevant, it's the actual tax levels that count. PE are good at spotting the ironic!
One of Greece's major problems is poor tax revenues, partly because their tax laws are rubbish and partly because they're not reliably collected. If a country isn't collecting tax properly then it doesn't really matter what rates are set; no-one's paying them anyway.
What Greece really needs now is to get a government which makes the various government organisations work properly. If anyone is going to do anything helpful for the Greeks, helping them make their civil service run properly would be amongst the best options. Trouble is that means breaking a few cultural, social and political taboos.
What Effective Tax Collection System Did For The UK
One of the reasons why the UK survived the economic down turn is that lenders knew that the HMRC was (despite all it's other faults) a fairly ruthless tax collecting machine; the UK could always tax it's way out of its debts. So lending money to the UK was seen as lower risk. Lenders were practically scrambling over themselves to lend the UK government their money at the most absurdly cheap rates.
And if you look at it from the lenders point of view, they had 100s of billions at risk. With that sort of money you cannot withdraw it all and hold it as cash, you cannot trust a bank to hold it because they themselves might go bust, shares are a risky proposition, you cannot buy that much gold or commodities without having a painful impact on the price. So just where do you place billions and be confident that it will still be there the following morning? Government bonds from a country you are sure won't default, if you can persuade them to take your cash. That meant putting the rates down.
Looked at that way, you could conclude that HMRC has done us all a big favour here in the UK. For every billion that doesn't have to be paid in interest, that's ~£15 not taken as tax out of the pockets of every man, woman and child in the country. We're currently paying £43billion per annum (or £670 taken as tax from every man, woman and child) in interest.
When you start considering that maybe 1/3 of the population are wage earners, that's nearly £2000 per year you're not getting in your family pocket. That's a serious amount of money for your average family.
And no, I don't work for them or have anything to do with HMRC other than moaning about my PAYE.
Greece doesn't have much in the way of industry, but the one we've all heard of is shipping. So why on earth does Greece have a large shipping industry? It's because there's no real taxation imposed on it.
Whilst it looks good on the international stage to have a world beating large industry of some sort, it is not socially useful at all if it does not pay tax and does not expend much cash in your home country or employ lots of your own population.