Yes, it\’s a real cracker. As always.
Over a period of thirty years top rates of income tax have fallen from 60% to
45%, corporation tax rates will have more than halved,
And see page 56 here. The effective average corporation tax rate has barely budged and nor has the average marginal tax rate.
What has actually been done is reducing allowances at the same time as reducing the headline rate. And given that Murphy defines tax avopidance as the difference between the headline and actual rates, this has reduced tax avoidance at the same time.
It\’s also possoible that he\’s got those income tax rates wrong as well. I can\’t remember when it was that the employers\’ NI payment was uncapped. If anyone does know please let me.
The share of national income paid to labour has fallen; the share to
profits has risen.
And we\’ve been through this before as well, haven\’t we? The corporate operating surplus is smaller today as a percentage of GDP than it was in 1982.
It\’s true that so is the labour share of income: but the difference is a rise in taxation and self employment income. Not a rise in profits.
So, if the man\’s going to start with entire bollocks as his inputs then, well, what do you think we\’re going to get out as a result, eh?