[Info-vax] FWIW: HP to spin off PSG?

[JF Mezei]

Paul Sture wrote:

> The UK had a period in the late 1980s where reducing tax rates actually 
> increased tax revenues.

The Republicans in the USA seem to only know one recipe: reduce taxes.

The problem with this is that "reducing taxes" in and by itself isn't
enough.  You need to have deals to ensure that reducing taxes will bring
new revenues.

There are times when reducing taxes won't bring new revenues but will
prevent companies form leaving. This is the lesser of the 2 evils, but
it is still not good. (no additional revenues).

You also have to have a whole ecosystem which makes your country
attracitive to invest in. Not just taxes, but also regulations,
paperwork etc. So if you are a european company and the UK makes it
easier to do business in, then you will think about locating in the UK.
This includes educated workforce (or availability of low cost workforce
depending on the type of manufacturing).

If the big white elephant in the room is high cost of labour, then
lowering taxes by a small amount won't change anything and jobs will
continue to shift to china/india.

If the problem is high taxes, then lowering them will help. But if the
problem is elsewhere, lowering taxes won't work.