From the Economist. For anyone for whom voting Labour might seem sensible ..

But what will happen to growth in this scenario? Britain is facing a post-Brexit future in which businesses must decide whether they will have sufficient access to the single market to base themselves in Britain or, if they are international, whether they might want to move back to America (if Mr Trump ever unveils his tax cut) or to Asia. A business contemplating a Labour government will face the following outlook: a tax rate gradually rising to 26%, a higher tax on executive pay, higher tax rates for the company itself in high-earning industries like finance, and more restrictions on labour hiring policies (workers will get full rights from day one, no zero hours contracts, there will be “sectoral collective bargaining”, a higher minimum wage, and four extra public holidays).

It doesn’t sound like a very appealing offer for companies thinking about staying in, or coming to, Britain. Yes, as has been pointed out, Britain has the lowest corporate tax rate in the G7 but the direction is generally down; Britain will be moving against the tide at just the moment when its future is most in doubt. Think about a big American bank; it will have to pay the excess pay tax, its employees will be taxed more, it may be hit by the bank levy and its clients will be taxed via the “Robin Hood” tax on derivatives. That is a big incentive to move back to New York, or to Dublin for EU business. Some may say “good riddance” but the banks’ employees pay a lot of tax. The result is that the tax take will be a lot lower than Labour thinks and growth will be slower.

Posted By: paulg, May 16, 17:04:32