On Ritchie\’s new paper again

Usual problem.

He ignores tax incidence.

It\’s not the companies paying the tax. It\’s some combination of the shareholders and the workers. And the smaller and more open the economy, the more it is the workers.

So who will really be hit by this? Quite, the workers in the smaller and more open economies. Those in the developing countries that is.

Well done Mr. Murphy. You are campaigning to reduce the wages of the poor. I congratulate you. Just see what can be achieved by an ignorance of economics!

8 comments on “On Ritchie\’s new paper again

  1. So if a company is making a profit in country A and a loss in country B it will pay tax on its local profit in country A and a tax on group profit in country B. As a result total tax paid may exceed net profit. If it has a high-volume low margin business in country B and a modest volume high-margin capital-intensive business in country A then country B will demand, say 30%, of group profit before depreciation and again total tax could exceed net profit.
    Murphy says it will not want to withdraw from country B. That is utterly ridiculous since the alternative is bankruptcy.

  2. The shorter John77:

    Murphy … is utterly ridiculous

    Well, yes. But how do we get this more widely realised outside our little circle of (mostly) free-market (mostly) libertarian (mostly) male (in world-wide terms) privilege?

  3. Tim

    You’ve omitted ignorance of history, philosophy, international law, human nature and the real world (I’m sure many could add to that)- This piece is actually so poor it could be used as a guide as to how ‘not to propose an international tax’ – I’ll check what @MurphyRichards says on it, as that’s the real account.

  4. Leftist fantasy logic; once you’ve assigned substance to entities like “the government”, “the state”, “companies” or “institutions”, and made them exist beyond their constituent persons, then its rather pointless trying to make a realistic policy out of it.

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