This is CBSI in the world, a conversation with Joseph Sternberg in London.

He writes political economics for the Wall Street Journal editorial page where he's a

member.

And a headline in the editorial page of the Wall Street Journal recently points to an

odd disconnect.

The British business tax revolt goes the big head.

Prime Minister Rishi Suneak gets a lesson in tax rates and business investments.

If I understand correctly, not only is the corporate tax rate under the Prime Minister's

plans with his Chancellor Mr. Hunt, to go from 19% to 25%, but the threshold for the top

45% personal income tax is to move from 125 to 125 from 150.

This is a complicated way of saying it's not the rich, it's the middle class.

Joe, how does this grow the economy?

Does Mr. Suneak answer that question?

No, he doesn't, and no, it doesn't grow the economy.

This is becoming a major problem in the United Kingdom right now, the economy, because

it is teetering on the brink of recession.

I still think that it's quite likely that there will be some kind of notable downturn

within the next year or two, although hopefully there won't be.

And the reason would be that they've always had a problem stimulating business investment

because the tax regime is so unfriendly to the kind of business investment that creates

innovation and productivity and entrepreneurship and jobs and wage growth.

UK has enormous trouble stimulating that.

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