Companies do not pay corporation tax

Interesting source:

However, in reality, VAT, like
any other tax on a corporation, will be paid by some mixture of its customers,
employees, suppliers, and shareholders.

That\’s the new economics foundation.

Yup, when an idea has got into the sluggard brains of even those people I think we can fairly call it well established.

Companies do not pay tax, ever. They cannot, it is simply not possible in this flavour of the universe.

So could we thus, please, make sure that all further conversation about \”taxing companies\” or even \”taxing banks\” takes account of this very important point?

Yes, this does mean you, Robin Hood Tax peeps. The incidence is not on the bank, it cannot be on the bank. Thus we want to find out where the incidence is before we impose the tax, don\’t we? Owen Tudor at the TUC for example, yes, this means you too. Who will actually pay this tax of yours is the most important question to answer.

I say it will be all users, the consumers, of the products of the financial system. Further, I say that the incidence of this tax will be above 100%. That the costs paid will be greater than the revenue raised. Making it a very bad tax indeed.

That I\’ve been making this point for over a year now makes me something of a bore, I know, but I really would like it if someone who supports this blithering idiocy of an RHT would try to answer the point.

8 thoughts on “Companies do not pay corporation tax”

  1. “Companies do not pay tax, ever. They cannot, it is simply not possible in this flavour of the universe.”

    Now get them to understand that Governments have no money.

  2. Actually, the *incidence* is on the bank. It is the cost that is elsewhere, hence the love of socialists of levying tax on the hated banks.

  3. we can talk of taxing exports, taxing cigarettes without getting in a lather about cigarettes not actually paying taxes because they are just little tubes of tobacco and don’t have bank accounts. I think we can talk about taxing corporations, understanding this means taxing corporate profits

  4. Um, Luis, we don’t tax ciggies to stop tobacco firms getting rich, we tax them to try to stop people smoking, or at least to pay for the NHS having to deal with the lung cancer etc. The incidence there is very much on the customer/smoker, it is in fact the whole point.

  5. Luis, we can talk about taxing cigarettes because everyone knows that the cigarettes don’t pay the tax themselves.

    Unfortunately the same is not true of talking about taxing companies. Indeed much of the rhetoric implies that the burden of the tax does fall on the company.

  6. “I think we can talk about taxing corporations, understanding this means taxing corporate profits”

    But this doesn’t help, because it still presents as if ‘corporate profits’ are a thing in their own right, entirely distinct from actual people.. the people who own the corporation (and its profits).. which is kinda the issue at hand here.

  7. OK but, from a unionised employee’s point of view, it is fair to say that the average worker will probably bear a higher proportion of Employers National Insurance Contributions than of a financial transactions tax raising the same amount. The welfare loss of Employers NICs is probably greater too.

Leave a Reply

Your email address will not be published. Required fields are marked *