How remarkable from Ritchie

Now by no means all those people will be paid without employer’s NIC being settled, of course. And it is also true that as result of being an offshore employer ISS may not be liable to pay employer’s NIC.

Hmm. So, employers\’ national insurance not being paid on some wages to some workers.

So, who benefits from this?

There could be technical argument as to whether the person liable is the employee (who has been winning from these arrangements to date)

Oh! It\’s the employee who benefits.

And that\’s tax incidence folks. Who is it that bears the actual burden of a tax? Clearly, the same person who benefits from the absence of that tax.

At which point we can see the entire absurdity of the claim that the UK is a low tax country, can\’t we? For the real income tax rate is income tax plus employer\’s NI (plus of course, employees).

And we also get the perfect argument to do away with NI: just merge it all into one tax system. The largest benefit of which will be that no one will be able to say that we\’re a low tax country.

7 thoughts on “How remarkable from Ritchie”

  1. Merging tax and NI would also bring an end to the quiet pretence that the UK has a National Insurance scheme, rather than a state Ponzi scheme.

  2. Tim: absolutely right. It’s also beneficial to part-timers and people only employed some of the year, who pay NI even though they wouldn’t be due for income tax.

    MRLC: there is no such pretence, and there never was one in the UK. The declared intention was never to create a fund, and always to pay out of current revenue. You’re possibly thinking of the US social security scheme.

  3. JohnB, there might not have been a pretence at the outset, but the impression by the vast majority of the population is that NI is hypothocated to the NHS. There has been no attempt at changing that mistaken view.

    Anway, all government schemes are Ponzi ones. 😉

  4. “the impression by the vast majority of the population is that NI is hypothocated to the NHS”

    ?!?!??!?! If that’s true, which I strongly doubt, it’s proof of my mostly-but-not-entirely tongue-in-cheek general suggestion that the democratic experiment has failed.

    People might more reasonably view it as hypothecated to pensions and JSA, because they might have noticed that in these areas contribution affects receipts. This would be false but not bonkers.

  5. Well ok, I’ll clarify. In all my experience of talking with people about taxes all have thought that NI was for the NHS. Even I thought that years ago before I saw the light. So maybe not the vast majority of the population, but everyone of my friends, colleagues and acquaintances.

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