Kay might have come to the right c0nclusion, but his reasoning was dire.
Dire reasoning, eh? An accusation of that from Ritchie?
So, first the implication is that he’s happy that these transactions take place even though tax is not paid. Indeed, he’d rather that than tax be paid. That puts him firmly on the wrong side of morality.
But then he assumes that we’d lose if tax was paid. Again, he’s just wrong. If tax was paid there would be a level playing field for all business. It could invest knowing it was competing fairly. Cheats undercutting prices would not exist. We would have better, more stable, longer term business. And people would pay more because they could trust those they were trading with. The economy would grow without tax cheating in other words. John Kay’s economics is just wrong.
Marvellous. Corporate tax cheats undercut prices. Thus consumers benefit from tax cheats. And that also means that the incidence of corporate tax is partly at least upon consumers: because in the presence of such taxes consumers pay higher prices.
All of which is difficult to square with Ritchie’s insistence that it’s actually the rich bastards that pay corporate taxes.
Or maybe it’s just dire reasoning.