You what Miliboy?

A Labour government would cut business rates for small companies’ premises, but increase the corporation tax that bigger firms pay on their profits, Mr Miliband will tell his party conference.

going to cock up the tax system even more? Move from a low deadweight cost tax to a high one? Increase the amount of economic activity that doesn’t happen for the same damn revenue collected?

Are you really an ignorant cock-knobbler or are you just playing one on the internet?

Just in case you really are an ignorant cock-knobbler, try looking at this.

Repeated taxation of real property (ie, business rates, land taxes etc) has the lowest deadweight costs of all forms of taxation. Corporation tax is at the other end of the spectrum, the highest (except for that terrible abortion that is an FTT). You are moving the tax system from a position which destroys the least wealth for the income produced to one that destroys the most for the income produced.

You really are ignorant, aren’t you? Cock-knobbler or not.

8 thoughts on “You what Miliboy?”

  1. Well yes and no. I’m sure that across the whole economy corporation tax is worse for business than business rates, but for small businesses its a huge deadweight on even getting their business started, because it has to be paid whether you make any profit or not. Rates don’t affect Tesco much, but Mr Patel’s corner shop they do, heavily. I think most business people hate rates, its seems fair enough that if you make profit you have to pay some to the State, but to have to pay taxes when you might be struggling to break even seems wrong.

  2. Remember of course that his beloved master Brown raised the corporation tax on small businesses, so I am dubious of his motives.

    Any small businessman who thinks Labour has his interests at heart needs his head examined.

  3. @ Jim

    That all makes sense unless you subscribe to the view that the incidence of rates is on the landlord, and so a fall in rates just increases rents.

    If the sum of these two costs is too high for a business to be viable then why do we assume the tax bit is to blame?

  4. I found it interesting that the BBC reported this as

    LABOUR PROMISE TAX CUT (ie to small businesses)

    whereas with exactly equal honesty they could have merely reported

    LABOUR PROMISE TAX RISE (ie to bigger business)

  5. It all fits the narrative of seemingly helping the little person but hitting the big rich bastard hard. Hardly anyone knows how corporation tax works. Witness the Vodafone, Starbucks, et al debacle. So saying that you’re going to penalise the likes of Amazon is just good political mumbo-jumbo even if it’s actually counter-productive. Politicians don’t really care what happens to the public so long as they satisfy their paymasters.

  6. “That all makes sense unless you subscribe to the view that the incidence of rates is on the landlord, and so a fall in rates just increases rents.”

    Not all businesses rent their premises you know. If they own it or are buying it on a mortgage then rents don’t come into it.

    I well remember 20 odd years ago when I had considerably more energy than today I built a cricket pavilion by hand. And when I’d finished building it along came the council with a rates demand. And I thought ‘Where were you bastards when I was working all my spare time to create something? Now you turn up when its done and demand money, just like the Mafia’

    ‘Nice pavilion you’ve got, shame if something happened to it eh?’

    Cunts, the lot of them.

  7. @ Jim

    If they own it then the price they paid (and could sell for) would take into account the rates. If they’re the landowner (paying a mortgage or not) then, well, the whole financial system has been working in their favor for quite a while now.. so my heart shall not bleed for them.

    Pavillion story is a bummer, though. Sometimes people improve their land to make the world a better place, and it doesn’t seem right for the government to come and demand a fee. But, more often, land values are increased by other people doing stuff (very often, the government) so the landowners are a huge net winner.

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