Sigh,
And lurking in the background we have the Oxford Centre for Business (Non) Taxation with their cloud cuckoo notion that businesses shouldn\’t pay tax in the first place since they simply pass the cost on to consumers or workers (but never to shareholders, oh no!).
Twats.
The Incidence of Corporate Income Tax on Wages – AEAweb
It says that 49% of the incidence is upon wages. The rest is upon shareholders.
It is customers that the corporate income tax does not get passed on to.
So, ignorant, idiots or lying? Your choice.
Do we have to choose?
All three.
Better still is their completely stupid/dishonest presentation of Mankiw’s position on the Laffer curve. The quote they attribute to him isn’t about the Laffer curve per se, but a specific argument being made in the 80’s about broad based tax cuts in the US.
I don’t think Mankiw has ever disagreed that some taxpayers at some times may find themselves on the wrong side of the Laffer curve and other things equal, a tax cut may raise tax revenue if the cut only applies to those taxpayers facing the highest tax rates.
I’ve seen that quote pushed out a few times by Shaxson and Co. (along with a CBO report that he frankly doesn’t understand).
jono (3) how right you are:
“My guess is that that the short-run answer and the long-run answer are quite different. For example, if you raised the top rate from 35 to, say, 60 percent, you might raise revenue in the short run. Over time, however, you would get lower economic growth, so the additional revenues would fall off and eventually decline below what they would have been at the lower rate…. I will pass on offering a specific number, as it would require more time and thought than I can offer just now, but I will opine that I think the long-run answer is actually more important for policy purposes than the short-run answer.”
http://voices.washingtonpost.com/ezra-klein/2010/08/where_does_the_laffer_curve_be.html
to misquote Keynes…in the long run, you pay taxes…you can hide income and wealth in places, but eventually, if you need recourse to that wealth, some form of tax will come to bear on it
“It is customers that the corporate income tax does not get passed on to.’
What?
Of course some of the Corporation Tax burden falls on customers, in the pricing of goods and services as far as market forces permit.