Prediction: Hard Brexit - L'Ombre de l'Olivier "The crudest response (to an intransigent EU) is to simply and unilaterally declare that the UK will allow tariff free entry of goods from the entire world and that it will look at ways to strengthen its position as a financial center. The former is obviously just a UK benefit, the latter part is potentially a weapon to wield in a war against the EU." More below. Well, no, the UK could also revise its tax code reducing the corporate tax to zero (or an amount significantly lower than any EU nation). This would immediately pressure EU corporations to consider relocating. This would be dramatically exacerbated if the UK had a free trade agreement with the US/NAFTA.
"For example the UK might, say, declare that it will not share tax information with countries with which it does not have a free trade deal in place or in the works. Since it is highly likely that it will have deals nearly ready to sign with much of the Anglosphere (as well as some of Asia) this will effectively mean the only developed nations that it won’t share tax information with are EU ones. This would make London a tax haven for EU entities which means that if EU citizens/companies want to stash their loot in London to avoid paying local taxes on it (because you can be fairly sure that the UK tax rates will be lower) the UK will not tell the EU tax authorities how much capital and income is involved. At this point you can watch a giant money vacuum appear in London that sucks liquidity from all sorts of EU financial institutions and associated nations leading to their economies going titsup.com." The danger is far greater for the "Block Heads from Brussels" and far less for the UK. The EU is a demographically dying economic block, the UK was foolish to bind itself to this dying block. But now Britain can fly, and it should. The primary concern should be to create an Anglospheric Free Trade Block based in actual free trade. Only secondarily should the UK place significant effort on Brexit which I also believe is likely to be a Hard Brexit. Thanks: Instapundit
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