You're 'avin' a Laffer....

I'm no economist, but I do know that the SNP's plans to compete within the UK on Corporation Tax are flawed, as I blogged here and as Richard Murphy blogged here. A separate Corporation Tax in Scotland is contrary to the interests of the UK, it doesn't create new jobs but it does cause distortions in the market and any claimed benefits are not certain and will take years to appear... if they ever do. 

Meanwhile the EU is moving towards harmonisation of business taxes, forcing Tax Pirate economies like the Irish to toe the line, and making the policy that the Nationalists want in a devolved UK, i.e.cutting business taxes in isolation, impossible to implement if they ever achieved their dream of "independent in Europe".
So it's already a dog's breakfast, a fact emphasised by John Swinney's incoherence when trying to defend it on Newsnicht. 

Nevertheless the bold John yesterday issued this press release.....and now he seems to have swallowed the whole right-wing Laffer Curve nonsense... y'know the bit where Tea Party Republicans claim that lowering taxes always increases government revenues...

"There is clear evidence from around the world of the benefits from lowering burdens on business....Lower corporation tax is a vital source of competitive advantage in an integrated global economy, helping to attract new businesses and highly-skilled jobs. ......Corporation Tax has a significant influence on increasing the size, competitive strength, productivity and ambition of Scotland's business base. Lower rates of corporation tax boost incentives to invest in human and physical capital, and research and development, increasing firms' profitability and the ability to compete.....cutting the headline tax rate would not necessarily reduce tax receipts."

Proponents of the Laffer Curve are always willing to admit that it is counter-intuitive (translation "illogical") to believe that cutting taxes increases the amount of tax revenues gathered, but even they will only claim that it works if a country is "over taxed" in the first place. Say what you want about the UK, but it's not a high tax country for business in the first place. Corporation Tax is only around 26% and there are plans to reduce it, so the theoretical gain from the Laffer analysis wouldn't happen here (even if you believed in Laffer, which most economists don't).

Frankly, what a so-called "left wing" party like the SNP pretends to be is doing calling up neo-liberal mumbo jumbo to support an already discredited policy proposal is beyond logic and consistency. But then logic and consistency never were a Nationalist strong points. 

 

SNP sleaze....

Yesterday the SNP dropped its legal challenge which attempted to stop details of its so-called Local Income Tax becoming public. A total of £100,000 of public money has been wasted in the courts to prevent the Scottish people finding out that the LIT would create a shortfall of £400 million if introduced this year.

FOIs from opposition parties were blocked by John Swinney to prevent the information becoming public during the Scottish election campaign. Now the campaign is over he has cynically removed his objections to publication. But we still pay the bill for the Nationalists preventing us see the information in time to influence our votes. 

During the Major administration "sleaze" became the media word of choice to describe any politically related misdemeanour. It grew out of the "back to basics" sloganeering of the Major government, and moved in meaning from describing personal/sexual laxity of prominent people to being attached to almost any dodgy moves by the Tory government in any sphere, including the spending of public money in inappropriate ways.

Does this cynical ploy to spend our money to stop us seeing the truth qualify as "sleaze" in the accepted sense? Mebbes aye, mebbes naw.

What I do know is that if a Labour administration behaved in this way the newspapers and blogs would be humming with the buzz of Nationalist fury at yet another example of the degeneracy and corruption the politics of the union. Will we see the letters pages and the blogs flooded with cybernat discussion of this particular piece of Nationalist corruption?

My advice: don't hold your breath.