Published On: Mon, Nov 4th, 2019

Labour’s ‘dangerous’ corporation tax plan would ‘lower wages’ and hike ‘shop prices’ | Personal Finance | Finance

Campaign Manager for TaxPayers’ Alliance, Duncan Simpson, spoke to about impact of Labour’s manifesto plans on the taxpayer. During the Labour Party’s conference in Brighton, Shadow Chancellor John McDonnell revealed proposals to increase the tax that all limited companies must pay against their profits. Mr Simpson warned that this move would be “dangerous” and directly lead to “lower wages” for workers and an increase in “shop prices”.

He told “I think the policy of increasing corporation tax is generally not advisable.

“In a literal sense it is businesses who pay corporation tax.

“But in reality, it’s a combination of workers through lower salaries.

“Share holders who risk their money to put into companies who have lower dividends and lower returns.”

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He continued: “And then it’s also consumers who pay more through shop prices and services and goods.

“I think they want to increase it to levels it was around 2010, about 26 percent.

“If there is a higher rate of corporation tax, I think that will be quite dangerous.”

The current main rate is 19 percent, and is planned to be reduced to 18 percent in 2020.

He continued: “Wages should broadly match the productivity of your workforce.

“If there’s a demand to say we’re for cutting the workforce by 20 or 25 percent but actually maintaining the same wages.”

“That’s not conducive to a lot of small businesses, in particular so that’s very difficult.”

Conservative MP Rishi Sunak, the Chief Secretary to the Treasury, also slated the plans: “John McDonnell offers nothing but failed ideas which would wreck our economy, harm businesses and drive out investment.

“Far from delivering for the many, McDonnell’s damaging plans would leave families with less money in their pockets and fewer jobs. Labour would turn back the clock, with working people paying the price.”

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