The joy of this is that he just doesn\’t realise where he\’s cocked up.
The second is that, despite the arguments presented by many economists that these taxes will simply be passed on to consumers, they will in fact very largely be paid by the banks themselves.
So all the economists are wrong about the incidence and Ritchie is right. So far so normal.
Most especially that is because much of their cost will be borne by bankers of whom there will be many fewer with many of those remaining being paid less than now.
Eh? So the incidence won\’t be on the banks, it will be on the workers?
And even better, the incidence will be on the banks because the incidence will be upon the workers?
It\’s the usual damn ignorance of what the economists are talking about. Tax incidence can be on, in theory, the company, the consumers, the workers or the shareholders. We eliminate the company because a tax means that someone\’s, some live human being\’s pocket, is lightened by a tax.
We are thus left with incidence being upon the workers, the consumers or the shareholders. Ritchie is now insisting that because incidence is on the workers that means that it\’s the banks paying it.
Note also how he\’s twisted himself here. When I say something like \”the incidence of corporation tax is mainly on the workers in the form of lower wages\” he insists that it cannot be. But now, because it\’s convenient to his argument, a tax upon financial transactions falls mainly upon the workers.
BTW, has anyone actually seen any evidence of this? Other than Ritchie\’s musings?