Stellar Opportunity for UK to Set Example for the World

By: Mike Shedlock | Mon, Jul 11, 2016
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IMF head Christine Lagarde has flip-flopped twice on the impact of Brexit.

  1. Ahead of the vote on Brexit, IMF head Christine Lagarde warned of a prolonged period of uncertainty.
  2. On July 3 Lagarde, said Brexit provides the EU a "Better Opportunity for Reform"
  3. On July 7, Largarde was worried Brexit would lead to "Disastrous" Trump-Style Protectionism

View number 2 is ridiculous. Yet one can change two characters in the sentence and get things correct.


Stellar Opportunity for UK

The idea that a group of 27 nannycrats are going to agree on needed reforms and implement them is ridiculous.

However, change sentence number 2 to "Brexit provides the UK a Better Opportunity for Reform", and you have the right idea.


Let the EU Self Destruct

France and Germany want financial transaction taxes. Let em. It will mean more business for the UK, not less.

France insists on agricultural tariffs. Should the UK care now?

The EU does not like Ireland's low corporate tax rate so much so that the EU is Considering a Minimum Corporate Tax.

Should the EU insist on such silliness, it will drive business to the UK, not away from London.


Trade War the Right Way

The UK should preemptively stick it to the EU by slashing its corporate tax rate to 10%, lower than any country in the EU.

Country Corporate Tax Rate % Highest Lowest
Austria 25 55 25
Belgium 33 48 33
Bulgaria 10 40.2 10
Croatia 20 20.32 20
Cyprus 12.5 29 10
Czech Republic 19 45 19
Denmark 23.5 50 23.5
Estonia 20 26 20
Finland 20 61.8 20
France 33.3 50 33.3
Germany 29.65 56.8 29.4
Greece 29 49 20
Hungary 19 50 16
Ireland 12.5 50 12.5
Italy 31.4 53.2 31.4
Latvia 15 29 15
Lithuania 15 20 15
Luxembourg 29.22 40.29 28.6
Malta 35 35 35
Netherlands 25 48 25
Poland 19 40 19
Portugal 21 55.1 21
Romania 16 38 16
Slovakia 22 45 19
Slovenia 17 25 17
Spain 28 35 28
Sweden 22 60.1 22
United Kingdom 20 52 20
Euro area Average 24.6 36.8 24.3
European Union Average 22.8 35.2 22.8

The above table created from Trading Economics data.


Black Holes

France, Germany, and Belgium are hell bent on sticking it to the UK to make a point.

Recall that the Belgian Premier Warns EU Won't Help UK Out of "Black Hole"

Ironically, If the UK does things correctly, it will be the EU that falls into the black hole.


Set Example for the World

Shed of inane EU rules and regulations coupled with the freedom to do anything it wants, the UK has a golden opportunity to embrace the benefits of genuine free trade and growth via low taxes.

I have often stated the first country that fully embraces free trade, regardless of what any other country does, will come out stunningly ahead.

The UK now has that chance.

 


 

Mike Shedlock

Author: Mike Shedlock

Mike Shedlock / Mish
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Mike Shedlock

Michael "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Visit http://www.sitkapacific.com/ to learn more about wealth management for investors seeking strong performance with low volatility.

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