In other words, increasing the corporation tax rate kickstarts the economy in a way that a corporation tax cut can’t. And it pays for itself.
No Spud, no, it doesn’t. From your own workings:
Right now, and I summarise, with a corporation tax rate of 19% and a 20% allowance on capital spending a year a large company in the year that spends £100 on capital equipment gets a cash rebate of £100 x 19% x 20% = £3.80 in the year it spends the money. Tory plans to reduce the corporation tax rate to 17% reduce this to £3.40. That, to be candid, provides no incentive for investing at all. This is a tax system for rentiers and bankers. It does nothing at all to encourage any activity in the real economy where people work and value is created.
Now change the tax rate to 26% and offer 100% first year allowances and the allowance is worth £26, or near enough seven times more.
It’s the change in allowances which make the difference, not the corporation tax rate.
And it’s not even a cash rebate, is it?
Wasn’t this man an accountant once?