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From The Socialist newspaper, 10 March 2021

Super-deduction will help big business pay less tax

  (Click to enlarge)

Nick Hart, Black Country Socialist Party

The Tories are introducing 'super-deduction' for the next two years before corporation tax marginally rises. For every 1 invested by businesses, they will be able to wipe 1.25 off taxes paid on their reported profits. This will go alongside a host of existing 'creative accounting' methods that already allow big businesses to avoid upwards of 90 billion in tax each year.

Super-deduction will reward large firms who are already doing well. If Amazon's delivery and warehousing arm invests in new kit at a similar rate to its capital spending in 2019, it will face zero taxes on its profits. Previously publicly owned utility, transport and delivery companies that have to regularly replace their infrastructure and vehicles, will simply be able to hang on to a greater portion of their profits.

As well as yet another indirect handout to big business, this latest 'corporate welfare' is a damning verdict on 21st century capitalism. Investment by British firms - that super-deduction is supposed to encourage - is stuck at historically low levels. It underlines the inability of capitalism to develop new technology without a massive leg up from government.

Free-market capitalism doesn't encourage innovation or healthy competition between businesses. The capitalist class is reluctant to stump up the cash to cut the time taken, or the environmental impact, of producing and distributing their products. Instead, they plough increasing amounts of their profits into rewarding executives and buying back shares.

Much better to replace this chaotic system with one based on democratic socialist planning, which can really begin to unlock the possibilities of technological advances to deliver for the working-class majority, not the big corporations.

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The coronavirus crisis has laid bare the class character of society in numerous ways. It is making clear to many that it is the working class that keeps society running, not the CEOs of major corporations.

The results of austerity have been graphically demonstrated as public services strain to cope with the crisis.

The government has now ripped up its 'austerity' mantra and turned to policies that not long ago were denounced as socialist. But after the corona crisis, it will try to make the working class pay for it, by trying to claw back what has been given.

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In The Socialist 10 March 2021:


NHS pay

NHS pay - 15% now

NHS workers say: We are ready to fight Tory pay insult

Police disgracefully stop NHS pay protest


News

Super-deduction will help big business pay less tax

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