Chart of the week: Labour’s tax plans could curb growth

But within international ‘norms’

Labour plans to increase the corporate rate to 26% in 2020 from 19% today. We believe that would very likely have an adverse effect on wages and investment. The academic literature tells us that economic growth is far more sensitive to changes in corporation tax than it is to taxes on personal income, consumption or property. Still let’s not get carried away. As our chart shows, Labour’s plan for corporation tax does not stand out conspicuously in an international context. You can read more of our analysis on what a Labour government might mean for the UK economy and investors in our InvestmentUpdate Oh Jeremy Corbyn 2.0.

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