We agree with the IPPR, let's abolish corporation tax

IPPR describe themselves as a progressive think tank which is why it's so wonderful to see them proposing a properly progressive idea - let's abolish corporation tax. This isn't, of course, what they think they are suggesting but it is that very thing. For they insist that all sources of income should be taxed at the same rate. Which means that, if dividends are to be taxed at normal income tax rates, we must not tax those same dividends at the level of the company. 

The rates and allowances for employee NICs and income tax should be
combined into a single tax schedule, and applied to all incomes on an
individual, annual basis. All income would be treated under the same rates,
irrespective of whether it was sourced from labour earnings, savings, trusts,
dividends or property rents. 

We're most certainly not averse to a merger of NI and income tax. We'd insist that when it does happen that employers' NI must be included - just so that all can see how not a low tax nation we are.

That still leaves that dividends point. Currently corporate profits pay corporation tax, dividends being paid out of that post-tax income. Whether tax is collected at the corporate or personal level is a second order consideration, we'd prefer, as here, at the personal. The current system deliberately reflects this reality, that's why there are those lower dividend tax rates at the personal level. So, we abolish those, tax as income purely and simply.

Therefore we must abolish the taxation at the corporate level, abolish that corporation tax charge. As we've been saying we should anyway for a long time now but it's nice to have progressives like the IPPR on board as well.

Alternatively, of course, they've just not understood their own proposal something which, frankly, wouldn't surprise either.