New Statesman | Corporation tax rates around the world

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New Statesman | Corporation tax rates around the world

Ireland retains its much-cherished 12.5 per cent rate (the lowest in the OECD), but the Franco-German bid to abolish "distorting" rates means this may not be the case for much longer. Surprisingly, the countries with the highest rates of corporation tax are the United States (39.25 per cent) and Japan (39.5 per cent), the largest and the third-largest economies in the world.

Despite the reduction in UK corporation tax from 52 per cent to 28 per cent, revenue from CT rose from 5.4 per cent of the total tax take in 1979
to 7 per cent in 2009. So, is this a vindication of the Laffer Curve? Not necessarily. A likelier explanation is the decline in wages as a share of GDP (from 64.5 per cent in 1975 to 53.2 per cent in 2008) and the concurrent rise in profits. As Gavin Kelly suggested in a recent Staggers post, one of the defining challenges for British capitalism is to recouple growth and wages.

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Donagh is the editor of Irish Left Review. Contact Donagh through email: dublinopinionAtgmail.com