Jeez, tax incidence folks, tax incidence

It means 1.2 million people will be braced for a tax rise, the details of which are expected to be published later this month.

Mr McDonnell will also decline to rule out increasing employers’ national insurance contributions, prompting fears the party is planning a stealth raid on business.

Employers’ NI is incidence upon the wages of the workers.

Even Snippa manages to get that one right.

The Telegraph, less informed about the economics of tax than Spud.

10 thoughts on “Jeez, tax incidence folks, tax incidence”

  1. Bloke in North Dorset

    “The Telegraph, less informed about the economics of tax than Spud.”

    Along with 99.9% of the voting population, which is why politicians get away with it as a strategy.

  2. Being generous, I guess ERNI would be incident on the business in the very short term, like up until the next round of pay reviews.

    Folks wouldn’t immediately see their take-home pay drop, so would see it as a tax on business.

    Then yep, the payrise budget would take the hit at the first opportunity, passing the incidence on to the workers. But they wouldn’t realise it. Sneaky: a stealth tax on employees, as you say.

    (I have explained incidence to a few people I know, so I’m trying to get the word out in my own little way)

  3. …or there’d be redundancies to balance the budget.

    And the average idiot would blame their employer for being greedy, rather than the thieves at HMRC.

  4. Bloke in North Dorset

    Don’t forget the incidence on shoppers, much quicker to raise prices and/or reduce quantity and quantity.

    I try to do my bit as well but it is an uphill struggle. Its one of those subjects as there as none so blind as those that will not see.

  5. I’ve got a really leftie friend, though that rare case of a leftie for the right reasons – a really nice person who is misguided, carries guilt around etc. Got incidence. Also got how the minimum wage prices folks, particularly the disabled, out of the workforce. Didn’t like it – fair enough – but got it.

    Got another leftie friend: less leftie, but works in the public sector. Generally refuses to understand this stuff, despite being more than intelligent enough. I guess they don’t like knowing how sausages are made.

  6. It’s tricky Cynic. I have a debate with a lefty on another forum who can’t get that landowners benefit from farm subsidies, “what about the tenant farmers?”, he says. You can try explaining that pensioners filling their bird feeder is a benefit to cats, but it still doesn’t register more than a flicker.

    I notice too that Labour have not ruled out raising Corporation Tax. Working people will also pay much of that.

  7. What bothers me most is the lip-curl. To a public-sector-ite complaining about Starbucks dodging tax, I explained this as best as I could:

    Cue sneering references in response to companies “just obeying the rules”.

    Erm… well, yes, my friend. Those are the rules. And you work in government, I don’t. Why are you complaining about companies obeying your lot’s rules?

    Yep, none so blind.

  8. There’s a similar popular blindness on the topic of occupational pensions being “contributory”.

  9. My (teacher) brother didn’t believe that his public sector pension was an unfunded one – because there were deductions in his payslip.

  10. On BBC R4 yesterday (Sat 6 May) 11AM:

    Brown’s “1p NI tax rise” to fund NHS was understood by many to mean their tax would rise by 1p per year, so they supported it/him/Bliar/Labour

    Lib Dems now playing same game whilst simultaneously still whining about misleading £350m figure on Boris bus.

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