UK proposed corporate tax reform results #52
Description
One of the proposals from a few of the leadership candidates earlier this month was to set the UK corporate income tax rate at 15% (it's currently 19% and set to rise to 25% in 2023).
I just tried running this through OG-UK and got the following result (percent formatted).
| Variable | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2022-2031 | SS |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GDP ( |
+0.07% | +0.13% | +0.15% | +0.16% | +0.20% | +0.12% | +0.11% | +0.09% | +0.08% | +0.07% | +0.12% | +0.27% |
| Consumption ( |
-0.04% | -0.92% | -0.20% | -0.02% | +0.06% | +0.13% | +0.16% | +0.17% | +0.18% | +0.19% | -0.03% | +0.47% |
| Capital Stock ( |
+0.09% | +0.25% | +0.46% | +0.49% | +0.53% | +0.55% | +0.54% | +0.53% | +0.51% | +0.49% | +0.44% | +1.20% |
| Labor ( |
+0.05% | +0.07% | -0.01% | -0.01% | +0.02% | -0.12% | -0.13% | -0.14% | -0.15% | -0.16% | -0.06% | -0.23% |
| Real interest rate ( |
+0.98% | +2.37% | +1.98% | +1.93% | +1.92% | +1.72% | +1.70% | +1.70% | +1.71% | +1.72% | +1.77% | +0.76% |
| Wage rate | +0.01% | +0.06% | +0.16% | +0.18% | +0.18% | +0.23% | +0.24% | +0.24% | +0.23% | +0.23% | +0.18% | +0.50% |
For a ten-point rate cut, these results seem small. I'm definitely reading them right as already percentages right? It could also be the fact that we're still using the linear tax fit.