Raising business taxes 'would increase double-dip recession risk'

The risk of a double-dip recession could be magnified if the government increases its tax on businesses.

This is according to editor of Investment and Business News Michael Baxter, who noted that the government ’has to increase taxes’ moving forward in order to close the public deficit, but doing so may have negative consequences for the economy.

He stated that ’the government has got to raise money and there seems to be no alternative. The consequences are a possible move back into recession’, adding a rise in government spending is also going to have an affect on growth.

Mr Baxter added that he would be tempted to support a move to raise National Insurance contributions for businesses, but he noted the negative press coverage such a move would generate means implementing it would require a chancellor ’with an awful lot of guts’.

He was commenting after recent research from the British Chamber of Commerce revealed that 41 per cent of respondents think reducing the budget deficit should be the main priority for whichever political party comes to power in the general election. ADNFCR-2318-ID-19620754-ADNFCR