Alex Massie

Taxing Questions

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From the Adam Smith Institute:

Once again, Ireland seems to be the destination of choice for companies driven out of the UK by high taxes. Last week, reports Dominic White, WPP, Glaxo, International Power and AstraZeneca all hinted that they could follow Shire and United Business Media's plans to switch domicile to Ireland.

As the ASI point out, Ireland offers a corporation tax rate of 12.5%, compared to the UK's 30%. Attractive indeed. But what of Scotland you ask? Well, the SNP is a hybrid party as any analysis of its taxation policy reveals: Alex Salmond looks longingly to Ireland and dreams of a low tax Scotland that will be a business haven (as seems sensible, if only to offset some of the costs of being on the periphery). It's quite possible that an independent Scotland would favour a pro-corporation tax regime. If nothing else, it would be suicidal to implement policies that drove, say, the Royal Bank of Scotland out of Edinburgh.

How you square that with the SNP's milk and honey promises on public spending  is a different matter. At some point the money seems likely to run out, even if Salmond is a fan of the Laffer Curve. Hence, perhaps, the SNP's attitude to personal taxation:keep it high. I'm not sure why Salmond is never asked why he's in favour of lowering taxes on companies but not on individuals? One might think that the logic of tax competition might apply to individuals as well as corporations, after all...

UPDATE: A piquant issue given the rumour that Aberdeen Asset Management might leave Scotland for Ireland.

Written byAlex Massie

Alex Massie is Scotland Editor of The Spectator. He also writes a column for The Times and is a regular contributor to the Scottish Daily Mail, The Scotsman and other publications.

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