This is a little weird

You either think that encouraging an unlevel playing field for business so that the cheats get an unfair competitive advantage by not paying tax is fair, or you don’t.

Aren\’t we continually told that taxing business activity isn\’t a damaging thing to do?

In which case, not being taxed on business activity cannot be a competitive advantage, can it?

However, if not being taxed confers a competitive advantage then business activity being taxed must be damaging.

So we should abolish corporation tax then, yes?


4 thoughts on “This is a little weird”

  1. Not really. In principle one could hold the view that taxing business activity in general is not particularly damaging for the economy, while at the same time believing that taxing some businesses more than others (via unbalanced enforcement of rules) is, as such treatment is essentially a distortionary implicit subsidy.
    Whether or not one should abolish corporation tax is a related but different point.

  2. Business activity being taxed may well be damaging to business activity. However there is more to life than just business activity. By taxing businesses, government can spend money elsewhere – on education, healthcare, pensions, transport, armed forces, welfare, [insert pet project here], etc. Lowering tax on business would just require a corresponding rise in other taxes to fill the gap (unless you’re advocating less spending, which is a completely different matter). All taxes are distortionary to some degree, with the possible exception of Land Value Tax.

  3. Get your point: he cannot have it both ways. But do not follow your logic that if a tax is damaging it should be abolished. Cannot think of any taxes, not even taxes on “bads” that are not damaging in some way; not a poll tax or even that mythical panacea land value tax. At a guess, the most economically damaging is low-end Employers National Insurance Contributions, but it is a crowded field.

  4. It’s generally held, or so I’m told, that in order of damage, high to low, it runs something like this: corporation, capital gains, income, VAT, sales, land value. I Am Not A Murphy, so I don’t know how manifestly evil these all are on the Murphyomemeter, but then he’s a fuckwit, so who cares.

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