Should corporation tax be 25 or 22 or 15%? It is now going to debate with the launch of the Government’s growth plan. It is about new jobs and the future growth conditions for Danish companies, and here tax is an important part.
It might be more correct to ask the opposite. So – who pays the bill when the corporate tax is set up?
In fact, the Danish corporate tax has increased relatively in connection with the general globalization of the markets. The majority of the countries in which our companies have competitors have, in fact, lowered corporate tax more than Denmark over the last 10 years. Or they already had a lower tax than Denmark.
We pay everyone, both when the corporation tax goes up and down
Of course, all of us are paying the bill, both when the corporation tax goes up and down. There are no others to pay. If corporation tax goes up (relatively or absolutely) then we lose jobs – and that’s what is happening right now!
Conversely, if the corporation tax is reduced, the state loses revenue, and then the money has to go elsewhere. Or you also have to save – as now on cash benefits and SU.
However, if corporate tax is reduced, it is crucial that new jobs are created as well. There is no guarantee that companies will do when the growth climate is acidic, and a recession can lie around the next corner. There is a great risk that the money, at least in the short term, will land on the equity shelf instead.
Link the corporate tax with the number of jobs
Can you imagine that a reduction in corporate tax was linked to how many employees a company has? One can argue that a company that has many employees pays much tax through the income tax system. So the more employees the less corporation tax? Read the answer here https://offshorecitizen.net/tax/corporate-income/.
Then we should “just” discuss where the level should lie. It is also difficult enough, because our European neighbors have tax levels as low as 0%, and you can’t imagine that in Denmark?
However, an invitation must be to secure the new companies, our entrepreneurs, better conditions of the establishment – including conditions for tax payment. It can be here that most of the jobs of the future are stored.