The Sunday Essay: How cutting corporate tax rates raises revenue

Many thanks to Matthew Sinclair, of the Taxpayers’ Alliance, for the Sunday Essay below.  We accept Sunday Essay submissions from any of our readers – be they MPs, policy wonks or nothing to do with politics at all.  For more information on how to submit an essay, please click here – Pete Hoskin

With the public finances deep in the red many are arguing that there simply isn’t the money for tax cuts.  Britain has one of the largest deficits in the developed world and, as the economic slowdown leads to greater unemployment, borrowing could easily spiral out of control.  However, maintaining Britain’s high tax rates is not the way to control that deficit.

Spending has increased by around £30 billion at each Budget for the last five years.  That has created deficits despite a strong economy and increases in taxation on a broad range of activities.  Controlling spending is the essential step that any politician hoping to reduce the deficits has to take.