Spuds still not got it, has he?

Andrew says:
December 10 2019 at 11:35 am
This issue is a matter of substantial economic research, so with due deference to Prof Weeks, we don’t have to just take his word for it. What does the literature say? Certainly, when taxes on companies rise, then in the first instance, companies will just pay more tax on their profits, and the shareholders will suffer lower returns. But over time, shareholders will attempt to maintain a level of post-tax return on their capital, which will create pressures to decrease costs including wages paid to employees, and to increase prices charged to customers. So, down the line, who ultimately bears the tax? Answers on a postcard.

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Richard Murphy says:
December 10 2019 at 11:58 am
Read Prof Kim Clausing

https://econpapers.repec.org/article/ntjjournl/v_3a66_3ay_3a2013_3ai_3a1_3ap_3a151-84.htm

The answer? Most likely shareholders

Concerning that Clausing paper, Snippa and I have discussed it before.

In wider terms, it is precisely the jurisdiction shopping that such
companies undertake that explains the lack of evidence of an impact
upon labour of the corporate income tax.

I just wanted to check that that is the implication that you are
making in this part of your conclusion?”

Her response?

“Thank you for your email. Yes, that is the implication.”

Alternatively of course we could just say he’s not doing economics but politics.

4 thoughts on “Spuds still not got it, has he?”

  1. My rule of thumb, ‘the punter always pays’ applies. Everybody is a punter. You might be a shareholder, you might be a shareholder removed by a level or two. You might be a buyer of their product. The fact is that circulating money got removed and taken by the people who of all spenders are the least wise and efficient, the bloody government.

  2. Can\t help but notice that your original conversation was with a fat cvnt in an M&S shirt whereas Andrew’s is with a Michael Caine after a week on the piss impersonator. Is their some connection between these two people?

  3. “…we could just say he’s not doing economics but politics.”

    Given that much if not most of economics is not value-neutral or ideology-free, is that so surprising?

  4. Well, anyone who’s ever worked for a company doing a cost saving exercise knows that the aim is to get poor shareholder returns back to an acceptable level. And we do that by redundancies, pay restraint (or cuts if possible), or efficiency (redundancies and pay cuts together). Sometimes we try to increase sales or hire competent employees, but that’s hope over certainty so we prefer to cut the fat as shareholders don’t care for putting everything on red too much.

    It makes me think a little of before the scientific method, where “science” was done through philosophy rather than observational experimentation and data. But heck – that worked just fine for thousands of years…

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