George Osborne - sorry, he's still a twat (3)

Continuing my occasional series on why George Osborne is a twat, he's been a-makin' a fool of himself yet again...

I mean, promising to "match Labour’s existing spending plans and refusing to promise tax cuts", would be bad enough, but read on a bit and His Giddiness reckons there was a “compelling case” to cut Britain’s headline corporation tax rate to boost efficiency of the tax system and the economy. “In an age of globalisation, 28 per cent is too high.”

Right, businesses have outsourced call centres to India and manufacturing to China because their costs and wages are much lower than in Blighty, fair enough. The fact that the corporation tax rate for foreign corporation in India is 42.5%, and in China they put the rate for foreign corporation UP from 15% to 25% last year, is neither here nor there*. Their workers are still a lot cheaper.

So we're only competing with other European/high wage countries anyway. So why not follow the three-step plan as ably outlined by David B Smith on page 7 of this:

1. Get rid of Employer's National Insurance,
2. Reduce out-of-work benefits relative to in-work net incomes**, and
3. Scrap the National Minimum Wage?

All of which would cut the cost of labour to well below the levels of our nearest rivals, and seeing as 80% of our trade is UK-domestic anyway, it's important to remember that this would also boost employment levels and boost net employment income. Trebles all round, I think!

* Yes, I agree, in the narrow case of captive finance or insurance subsidiaries, the corporation tax rate does make a difference, but seeing as many European countries already tax such profits at 0% or 5%, so what? The best we can do is keep pace - with a narrow exemption for such truly internationally mobile profits, which I have long advocated.

** Being a bit of a softie, I would focus just as much on reducing means-testing in percentage terms as I would on reducing out-of-work benefits in absolute terms, but the logic is the same.