When a system is broken, the best approach is generally to scrap it and try something else, and that’s precisely what the solution to the corporate tax problem is – not further meddling, but to get rid of it entirely. In fact, it’s more than broken; it’s also poisoning the rest of the tax system in the round.
Just get rid it. No more taxes on profits, no more allowances, no more distortions.
Instead, business needs to be coaxed back into fulfilling its proper social function of investing in new ventures and creating well paid employment. Again, this purpose is best fulfilled by making profit a tax free zone, thereby providing the incentives for vibrant private sector expansion.
Part of the quid pro quo for an enlightened tax regime should be the steady introduction into low paid employment of a “living wage”.
The joy is that this would happen quite naturally. Given that well over 50% of the incidence of corporation tax is upon wages, the removal of corporation tax would, over time, mean that wages rise.
Hurrah, trebles all round!