dj
I am increasingly of the view that corporation tax, as long as it exists (of course libertarians would aim to delete all such taxes, but that could well take some time), plays a wholly negative role in penalising corporate success. Companies that are inefficiently run pay little, but those that are well run and could create wealth and jobs pay more. Moreover, we read in the UK that some large banks manage to pay little on their large earnings, owing to losses brought forward and an array of offshore vehicles, and even that some large newspaper corporations pay almost no tax in the UK.
A profit tax is a ridiculous concept in an economy that wants to grow. I would replace these by a business turnover tax. Quite simply, no losses would be brought forward, no profits would be calculated. The tax would simply be a percentage of turnover. So all banks would pay it at the set rate; so would all newspaper corporations. Inefficient companies would have to pay it, and some could be forced into receivership by having to pay more than now; but the profitable would find they paid less. By keeping their costs down, and given that no calculation of profit or earnings would be made, they would find they paid less by simply paying a percentage of turnover.
Finally, all companies would pay on their UK turnover, so offshore financial vehicles and the like would not reduce their liabilities, thus lowering the burden on the companies that currently pay corporation tax. Accountancy costs would be lowered by the elimination of profit/loss as a basis for payment.
