Blimey, Snippa gets one right

Tax Research UK founder Richard Murphy says this will be the “easiest tax on Earth to pass on”, as the tech giants like Facebook, Google, and Twitter are “effectively monopoly suppliers”.
“The reality is those platforms are unique and they can therefore pass the cost on if someone wants to advertise with them,” he says.
This stems from the fact the tax is on revenue, instead of profit. “This is essentially a sales tax levied on top of VAT on these companies and what we know about this form of sales tax is that it’s passed straight onto the consumer,” Murphy says.

So it is possible for him to grasp tax incidence then.

Now all he’s got to do is apply the same corpus of knowledge to corporation tax….

8 thoughts on “Blimey, Snippa gets one right”

  1. Andrew C - On Behalf of MegaBig Tax Powerhouse Think Tank

    “Tax Research UK founder Richard Murphy”

    An oft repeated phrase. As is “on behalf of Tax Research UK” and “Director of Tax Research UK”.

    A mighty impressive sounding organisation. Must be huge. Have a swanky HQ somewhere. Employ teams of researchers.

    Oh, wait, no. It’s just him in his spare bedroom.

  2. Andrew C

    That’s unfair and, frankly, insulting as it ignores the indispensable input supplied by the former wife of Murphy, who’s (still despite the divorce) a member of the LLP, and – for the cynics – an active member to boot. As a GP, her knowledge of tax is at least as good as Murphy’s.

  3. @BraveFart

    And as Spud is a repeated advocate for equal pay, it was always reassuring that he allocated the profits of the LLP 99% to himself and 1% to his missus.

  4. Cliche-lovers like to say that even a stopped clock is right twice a day. For Cap’n Tattie it’s probably better to say that a clock running backwards is right occasionally – but how often spends on its speed of regression.

  5. Corporate tax incidence is one of the most widely debated issues in economics. This from economist Arnold Harberger:

    “So long as the capital market works to
    equilibrate rates of return net of taxes
    and risk premiums, and so long as the
    imposition of a corporation income tax
    does not itself have a significant effect on
    the (pattern of) risk premiums associated
    with different types of activities, it is
    inevitable that in the long run the corporation
    tax will be included in the price
    of the product. That is, of two industries,
    one corporate and one non-corporate,
    each using the same combination of
    labor and capital to produce a unit of
    product, the equilibrium price of the corporate
    product will be higher than the
    equilibrium price of the non-corporate
    product by precisely the amount of corporation
    tax paid per unit of product.
    This result is taken by some people as
    evidence that the burden of the corporation
    tax is borne by consumers, that is,
    that the tax is shifted forward. Such an
    inference is far wide of the mark.”

    Also, this quote:

    “Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome.” source:

  6. Quite so, and Murphy consistently and vehemently insists that no part of the burden of corproation tax falls on labour. Which was the point of the post…..

  7. Sorry if my comment was misunderstood as I had not read the full article. My comment was simply meant to add to the discussion here.

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