Congratulations due Jim Anderton
Friday, November 5th, 2004
Congratulations due Jim Anderton. Cuts to the company tax rate right signal
Business warmly congratulates Jim Anderton on his support for reducing the company tax rate.
The Employers & Manufacturers Association (Northern) says Mr Anderton has drawn a very logical conclusion from his close involvement with industry as Minister of Economic Development.
"In his industry development portfolio, there's no doubt Mr Anderton has seen the undeniable merit in reducing the company tax rate," said Bruce Goldsworthy, EMA's Manager of Advocacy.
"The Minister is to be warmly congratulated for announcing this principled stand.
"Business also invites the Council of Trade Unions to consider the benefits of a lower company tax rate with an open mind.
"We have been saying for several years that, since it is a withholding tax, reducing the company tax rate would affect Government revenues only temporarily and be more than compensated by increased economic activity as company earnings were retained and invested in innovation, skills training, and new plant and equipment.
"It would help grow the economy with new and higher skilled jobs, the reasons that the UK, Canada, Ireland, Singapore and Australia lowered their company tax rates below the individual tax rate.
"In the UK businesses employing less than 50 staff and/or earning less than 2.8 million pounds, pay no tax on the first 10,000 pounds of net profit; 19 per cent is levied up to 300,000 pounds.
"Matching Australia's company tax rate of 30 per cent and other incentives for business investment is not enough; we need to better them.
"We hope Mr Anderton's call is just the start; at the very least business wants to see the same personal tax rate of 19.5 cents per dollar on earnings up to $38,000 applied to companies as to individuals.
"This is because 90 per cent of our small and mid sized companies earn net profit of less than $38,000 a year, and their owners earn no more and often less than the average wage.
"Giving priority to cuts in the company tax rate over the top marginal personal rate is the right signal to maintain and grow our education, health and overall standards of living."