Tee hee, they really have managed to get themselves into a twist here.
We are sorry to report that journalists up and down the country swallow and regurgitate this puffery. This is PWC\’s Total Tax Contribution rearing its ugly head once more. As we have remarked before, it is just bogus. Bob Mcintyre of Citizens for Tax Justice in the U.S. exposes the Total Tax Contribution concept as well as anyone can.
\”PwC is trying to get corporations to pretend their tax bills are bigger than they really are, by counting not just their actual taxes, but also taxes they don\’t pay, such as those paid by their customers, workers, suppliers, and so forth.\”
And note our recent blogging, in the same vein and in the context of the SABMiller story. It is another example of \”taxwash\” that PWC is flogging to anyone who can afford its services.
The real figure for the City of London is the one for corporation taxes: £7.6 billion – not £61.4 billion. 1.5 percent, not 12 percent. Of, if you are being generous, you include extras like air passenger duty, the congestion charge for London, customs duties, stamp duty land tax – and a few others, at £26.1 billion, not £61.4 billion.
We\’ve got two ways of looking at who is actually paying taxes.
We can look at who hands over the cheque. In the case of national insurance, income tax, corporation tax and so on it is that very company which does so. So the larger figure is correct using this method of measurement.
Or we can look at who is carrying the economic burden of the tax. Forget who hands over the cheque, who loses out from the imposition of the tax? (Note that this has nothing at all to do with who benefits from the spending of that tax.)
Income tax, quite clearly the worker. Employees\’ national insurance ditto. Do note what they\’re also saying here though, that employers\’ national insurance is being paid by the worker, not the company. They are therefore stating that the current basic rate of income tax in the UK is 45% or so and that the top rate is 63% or so. High enough even for them you would hope.
But let us take this one tax further. What do we know about the incidence of corporation tax? The first and most obvious point is that companies don\’t bear the burden. It\’s one of those taxes they don\’t pay \”but also taxes they don\’t pay, such as those paid by their customers, workers, suppliers, and so forth.\”
It is split between workers, shareholders and customers in some manner.
So, according to the TJN the total taxation of companies in the City of London is £0.
And similarly, according to the TJN, it\’s impossible for a corporation to ever pay taxes: they are all, by definition, passed on to some combination of workers, shareholders and customers.
All of which leads to a really rather interesting question: why in fuck are they running an international campaign to get companies to pay more tax when they know that it is impossible that a company ever pay tax at all?