I think the Guardian might have found a bigger idiot than Ritchie:
The research was carried out by Kevin Farnsworth, a senior lecturer at York University, who has researched and published studies of corporate welfare for more than a decade and who is launching on Wednesday an online database of grants made to companies.
To determine how much Britain pays for its businesses, he looked at the figures for the financial year 2012-13 – the last year for which there is a near-complete set of accounts. The elements of the £93bn corporate handout break down as follows:
Corporate tax benefits: £44bn Of the 93 major tax reliefs provided by the Treasury, 27 are aimed at business. The largest amount was spent allowing businesses to write off billions spent on plants, machinery and equipment among other items.
Depreciation is a subsidy now, is it?
Dear God, the stupidity.
And from one of his academic papers:
The most valuable form of tax benefit in cash terms is delivered in the form of capital allowances, which allow companies to write off investment in machinery and other forms of capital against taxation. They were originally provided in recognition of the fact that the current ‘assets’ of companies – in the form of existing plant and machinery – inevitably depreciate over time. In their contemporary usage, capital allowances do not simply provide an allowance for depreciation, they are used in order to encourage, and ‘socialise’ the costs of, new investment. The relative generosity of such schemes has tended to increase over time so that taxpayers bear an increasingly greater share of such costs. Companies can often claim close to, or even in excess of, 100 per cent of the costs of depreciation and they can do so upfront. The current UK scheme allows companies to write off 110 per cent of the costs of investment within the first year of the investment. Thus, taxpayers not only effectively pay the costs of the entire investment, the government provides an additional ‘bonus’ equivalent to 10 per cent of the total cost of the outlay. The cost to the taxpayer of such support was £21 billion in 2011-12 (1).
And this bloke has an academic job in the UK?