Taxing corporations

One of Richard Murphy\’s buddies wrote this report. They\’re talking about taxes in developing countries

A fourth goal is to strengthen political representation. When governments are more dependent on tax revenues and less on income from natural resources, aid or debt financing, this generally stimulates accountability to citizens regarding the use of government funds. The effect is strongest for direct taxes on personal and corporate income. Aid dependence, on the other hand, stimulates accountability to external donors.

What utter cock. Given that companies don\’t have votes their taxation does nothing at all to stimulate accountability.

Indeed, given that the populace in general (and it\’s the same here, this isn\’t something limited to ignorant foreighers) think that they don\’t, in the end, pay those corporate taxes themselves, the taxing of corporations actually reduces that accountability.

6 thoughts on “Taxing corporations”

  1. Oh come off it – are you really telling me that ‘business leaders’ exert no influence of the government (over and above their votes as individuals) and that what they demand from the state bears no relationship to the level of taxation being levied on their businesses?

  2. What Luis says.

    Why are you right wingers so obsessesed with corporation tax? VAT and Employer’s NIC are far, far worse in terms of their negative impact on the economy – and politicians know that everybody thinks that somebody else pays it.

    Surely, shareholders and business owners know (or believe) that corporation tax reduces their profits? Even if you believe this highly academic theory that says corporation tax is borne by employees.

  3. Straw man! Of course shareholders and business owners know that corporation tax reduces their return to capital. The criticism of corporation tax is that the incidence is disproportionately borne by employees (the second-largest group of those affected being consumers via higher prices, with the shareholders/owners bringing up the rear.) As a simple matter of tax minimisation, it is rational for the third group to shift a given portion of tax onto the other two groups.

  4. This part is a true laugh:

    Aid dependence, on the other hand, stimulates accountability to external donors.

    Who knew? Accountability to external donors, really?

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