We\’re told why we cannot just abolish corporation tax and tax money when people receive it instead.
Yet there\’s something missing from the analysis. A very basic piece of economics actually.
The entire economy, every single little bit of it, ends up in the pockets of an individual someone, somewhere.
Ineed, this is one of the ways in which we can measure the economy: we can (and in fact do for certain reasons) add up all the incomes of everyone everywhere and that is GDP.
This method measures GDP by adding incomes that firms pay households for the factors of production they hire- wages for labour, interest for capital, rent for land and profits for entrepreneurship.
So now we know that the entirety of all eonomic activity ends up in someone\’s pocket, somewhere.
So, if we wish to tax economic activity we know that we can do so simply by taxing what ends up in peoples\’ pockets.
We may not desire to do so, this is very true, we may desire to do other things with taxes and tax other things than incomes.
But there absolutely is not the sort of problem that Ritchie insists there is, that we must tax companies because we must tax the intermediary, the intermediate bit, because, as we can see from the above, all company profits end up in the pockets of someone, somewhere, and can thus be taxed at that level.