The graph above shows, in the last ten years, the amount of Corporation Tax paid by the profiteer as a proportion of the amount of tax paid by the worker. On this occasion I exclude VAT & NICs as both profiteer and worker pay them. Is it right that the worker pays more than three times in income tax the amount that a profiteer pays in corporation tax? For every £1 you pay on income tax, a profiteer will pay 30 pence in profit tax.
Err, yes, this is right and proper actually.
1) Taxation of returns to capital should be lower than taxation of the returns to labour. For there is less deadweight cost associated with the taxation of returns to labour than there is with the returns to capital. No, really, go and look it up.
2) You\’ve measured only Corporation Tax: but these are not the only taxes paid by suppliers of capital, are they? They also pay captial gains tax on any such capital gains and higher and top rate tax payers pay income tax upon their dividends over and above that corporation tax.
3) You\’re comparing total income tax paid with total corporation tax paid. But total income is rather larger than total corporate profit (very much so in fact). So the comparison is fatuous in the first place.
The identification of further errors by our PhD in Irish Feminist History as he paddles on the shores of economics is an exercise left to the reader.