The Prosperity Institute's analysis indicates that President Donald Trump's tax cut proposal could result in significant economic losses for the UK, estimating a £18 billion decline in foreign direct investment. The differential in corporate tax rates—dropping to 14% in the US versus 25% in the UK—means American businesses might prefer investment in their own country. Economists highlight that the UK's tax structure must adapt to retain business, especially given the critical state of public finances and competitive economic conditions according to statements from Labour and Treasury officials.
New analysis from the Prosperity Institute has revealed that President Donald Trump's proposed tax cuts could cost the UK £18 billion as businesses will flee to America.
The Prosperity Institute said, "If the United States government cuts US corporate tax to 14%, one point below the OECD's minimum threshold of 15%, this would give the United States an 11 per cent tax differential over the UK, whose corporate tax rate is currently 25%."
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