Let’s try another reformulation:
Because companies can’t pay tax they should be taxed as if they’re individuals under income tax rules at income tax rates on their worldwide income just like all other natural people
Now that, I think, works nicely. A UK company pays UK income tax rates now at standard tax rates of 50% and shortly to be 45% on their worldwide income wherever arising and whether remitted or not to the UK and let’s stop all of this nonsense about territorial taxes, remittances, and so on for companies. Let’s create a level playing field. That should give Bill Dodwell something to think about.
Well, yes, that is actually the argument. Just as an individual can deduct interest for business purposes, has allowances for investment etc. Yes, tax all profit that individuals receive from business in one manner and one manner only.
In the case of an incorporated business this would mean taxation of distributed profits at the normal marginal rate of the recipient. Simples. Abolish corporation tax, as companies really do not carry that burden anyway, and tax dividends, interest, capital gains, received from such companies at normal recipient marginal rates.
And the tax would have to be at the level of the recipient, not the company. Otherwise we would be taxing French, German, USian, holders of UK domiciled shares on their income. And that\’s not right at all: that income is righteously for the French, German, USian governments to tax, just as the income of UKites is righteously for the UK to tax. If the tax were at the level of the company then if, as an absurd example, Vodafone made profits in Germany then those profits should be taxed in Germany and not in the UK. And we know that\’s not right because Murph has told us it\’s not.
Yep, I\’m fine with that. So are most economists. So Ritchie\’s actually managed to get one right.
Ah, wait, sorry, he\’s being sarcastic, isn\’t he? Typical Murphmeister. He only manages to describe the right solution in order to reject it.