Jamie Rush, Columnist

U.K.'s Corporate Tax Cuts Offer a Lesson for Trump

They boost growth only if the money isn't taken from much-needed investment.

May 15, 2017 at 8:54 AM UTC

Jamie Rush is Director of Global Economics at Bloomberg in London. He is co-author of "The Price of Money" a guide to the past, present and future of the natural rate of interest and a Visiting Professor at the University of Sheffield. Jamie was previously Chief European Economist (2015-2025) at Bloomberg and has worked at the British Treasury, the New Zealand Treasury and the UK Office for Budget Responsibility.

Betting on a tax cut.
Photographer: Alex Wong/Getty Images

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U.S. President Donald Trump's plans to cut corporation tax are likely to cost a lot. Will the cuts boost the economy or just prove to be a sop to the wealthy? The answer may lie in Britain, which is already running that experiment.

Together with large cuts to public spending, lowering corporate tax rates was former British Chancellor of the Exchequer George Osborne’s signature policy. When he arrived in 2010, the rate was 28 percent; now it is 19 percent and is set to fall to 17 percent in years to come. It’s a big policy, and it came with a big price tag.