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 ($Y_t$)
+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 ($C_t$)
-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 ($K_t$)
+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 ($L_t$)
+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 ($r_t$)
+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.
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).
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.
cc @jdebacker @rickecon @MaxGhenis