Here. Page 1321, at the bottom:
It is a robust result of optimal tax theory that economies that are small in world capital markets should set a marginal effective rate of corporation tax- that is, a rate on the investment that just breaks even after tax- of zero.
That is essentially a production efficiency argument, an intertemporal analogue to an absence of trade taxes in developing countries. Small economies should trade at world prices for capital, just as they should for atemporal commodities. With the required after-tax return for capital fixed on world markets, the burden on any tax that a small economy imposes on capital must be shifted to immobile factors of production, most obviously labour, with a distortionary increase in the relative domestic cost of induced capital along the way.
Now don\’t forget, it\’s Ritchie, John Christiensen and Nigel Shacxston (Sahxston? Shackston?) who keep telling us that this tax incidence thing, this if you tax companies it\’ll end up being the poor bloody worker who really pays it, is rubbish. That\’s it\’s just a product of my fevered neo-liberal imagination. And yet here they are saying that this paper is:
We are very grateful to Tax Analysts for permission to republish one of the most important historical articles about tax competition,
So we have to ask ourselves, do they actually read the papers that they recommend? For this specific paper blows a huge hole in their entire campaign. It ain\’t companies that pay this tax: so their entire campaign to make companies pay more tax is nonsensical. If they do manage to get reporting requirements, or offshore rules, or \”moral behaviour by companies\” changed, those things they are campaigning for, then it\’ll just be the workers in those countries that have to pick up the bill, won\’t it?
And, recall, this isn\’t some product of my fevered neo-liberal imagination. This is actually from a paper that they recommend!
In short, what the fuck are they doing?