Comments: Tax incentives can transform the UK


I find the whole corporation tax issue very interesting. We have been fighting to have this looked at for a long time in Northern Ireland, in particular because of what the Republic of Ireland is doing just across the border.

We know we are fighting a losing battle with Brown to reduce it to 10% or less purely for here, but our concern is that we can't kickstart the public sector dominated economy without some focus on fiscal incentives to bring in FDI organisations. I would be interested in your views on the economic challenges for the regions, in particular Northern Ireland.



Posted by Ian Savage at April 16, 2007 03:43 PM

Dear David,
I would imagine that research conducted by the CEBR does not condition on the business cycle state of the economy. If the tax cut takes place when the economy grows above its trend level, the benefits could be different (perhaps higher??) than in the case where the economy is under-performing. This is important in the current context where (based on Bank of England estimates) the economy is expected to grow by some 2.8%-3% per annum for the next 2 years, which is higher than the (historical?) 2.5% trend level.
Best regards,

Costas Milas
Keele University

Posted by Costas Milas at April 16, 2007 03:45 PM
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