And yet even even more Ritchie

I am convinced that the corporate tax base can be captured and taxed.

No, it cannot. We know absolutely that the corporation does not bear the burden of such taxation. We\’ve known this since Seligman in 1899.

Come along now, you\’re two centuries behind the times Mr. Murphy. Time you caught up.

6 thoughts on “And yet even even more Ritchie”

  1. dearime, Tim didn’t say “200 years” he said “two centuries”.

    19th, 20th and 21st; 1899 is in the 19th century.

  2. Interesting to see the comments on the TR-UK site in regards to corporations “not” paying VAT and/or PAYE. As comments on TR-UK are only allowed if Murphy agrees with the content, does this mean Murphy is slowly admitting tax incidence?

  3. Ritchie’s clever response: “Seligman who?”

    Remember, the boy’s never actually studied economics… what with it being so out of touch with reality and whatnot.

  4. Well, yes and no. It’s a matter of perspective. Suppose you levy a tax on goods at the point of retail transaction. Who pays the tax? Could be the customer. Could be the shopkeeper. Income tax? Might be the employee. Or the employer. Or the customers.

    This is the problem with arguments about tax “incidence”. All you can actually say is that some money got hoovered out of the system at a particular moment. The question of which of the transactors “actually paid” it is pretty much meaningless; it was captured in mid air between them.

    So, we may note that corporate taxation falls on the customer and the worker. Ergo, the corporation does not pay it. But an income tax likewise falls on the employer (corporation) and its customers. And a sales tax falls on the corporation and its employees. And round and around it goes.

    Seligman was an activist Progressive, and was strongly in favour of income taxation as a means of redistribution, and strongly against laissez faire. Here’s a quote-

    “We pay taxes not because we get benefits from the state, but because it is as much our duty to support the state as to support ourselves or our family; because, in short, the state is an integral part of us.”

    Thus to Seligman, taxpaying was a civic necessity; to pay taxes was to be a citizen. Like many of his fellow progressives, “no taxation without representation” became, effectively, “your taxation is your representation”. Thus, Seligman wanted to shift the burden of taxation away from taxing the few via tarrifs or business taxes, to taxing everybody, progressively, proportionate to their income. Hence, the need to prove that the tax burden fell on them anyway.

    Not the ideal authority for classical liberals to be quoting then, perhaps.

    The simple truth is, that we all bear the burden of each others taxes, wherever they are specifically levied. Income taxes rise, so prices rise, so customers pay it in the end. Whatever.

    What would make most sense would be to simply choose one point in the money circulation system to tax at, rather than a zillion different ones. But for those who argue in favour of complex tax arrangements, Pigou taxes, property taxes, sales taxes, income taxes, and so on and on and on, it’s a bit futile arguing that just one particular point- the company “profit”- should be exempt.

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