and says measures are needed to remove the tax treatment bias that favours companies funding loans through debt as opposed to equity.
Eh? What? A debt is a loan and equity isn\’t either a loan nor debt. As written that line is completely impossible.
We all know what they mean of course: they\’re talking about the preferential treatment of debt over equity in the taxation system.
Not that there is preferential treatment when you actually look in more detail. Equity returns are taxed at the corporate level. Interest at the level of the recipient. Much of a muchness there really. And you most certainly could alter this system: tax the interest paid out by the company at that company level for example. But if you do that at the same time you\’ve got to make the interest tax free to the recipient. And I can\’t quite see that working politically. It might be the same thing economically but the idea that buying corporate bonds gives you a tax free income just won\’t fly.
Of course, there\’s another, much simpler, method of equalising the tax treatment. Just abolish corporation tax and tax all income from companies, whether interest, capital gains or dividends at the marginal income tax rate of the recipient. This would be true equalisation and it would also be very simple.
And hundreds of thousands of parasites would have to go do some real work for a living. Oh dearie me. Plus we remove some thousands of pages from Tolley\’s. Shame, eh?