The P³ tells us about American taxes:
About which he says:
Class warfare has taken place in the USA, and the wealth owning classes won. 20% of the overall US tax burden was shifted from the corporations largely owned by the wealthy onto working people. The tax haven assault was not only on the right of government to tax, it was also on the people of the world. As corporate profits have risen – and they have – corporate tax revenues have fallen.
People who actually know what they’re talking about would suggest something different. US law distinguishes between C corporations – who pay the corporate income tax – and S corporations where the owners pay the individual income tax on their share of the profits.
Over the past 50 years there has been a significant move – of perhaps 50% of the US economy – from the C corp form to the S corp. Thus some significant portion of the taxation of corporate profits has moved from that corporate share to that labour share. Because the corporate share charted there is the corporate income tax.
Ritchie’s argument really is that when he moved from using a Ltd company to an LLP for his work then that is proof that the remnant limited companies must pay more in profits tax.
But then grasping that would require knowing something about tax……
“the corporations largely owned by the wealthy”: could be. But I used to enjoy pointing out to people that “the wealthy” who owned companies were often their pension schemes.
US law distinguishes between C corporations – who pay the corporate income tax – and S corporations where the owners pay the individual income tax on their share of the profits.
Partnerships are pass-through entities just like S corporations. And let’s not forget that disregarded entities and unincorporated individuals are taxed on Schedule C of the Form 1040. If you look at the Donald Trump tax return Rachel Maddow made public, you’ll see that most of his income came from S corporations, partnerships and disregarded entities. That’s not all that unusual amongst high net worth individuals. Certain industries, such as real estate, lend themselves to use of s corporations and partnerships over c corporations in the areas of organizational flexibility and taxation. And there’s a lot of crap that goes into being publicly held; lots of business owners prefer to pass on answering to the SEC.
20% of the overall US tax burden was shifted from the corporations largely owned by the wealthy onto working people.
In the case of publicly held corporations, most are largely owned by pension funds and mutual funds. The tech sector is a bit of an outlier in this, but it is the exception, not the rule. In the case of privately held corporations, there would be no data available to Murphy regarding the personal wealth of ownership, because ownership and earnings – as well as taxation – are not made public.
As usual, he’s talking out of his ass.
The graph is also presented here with an interesting commentary. Mind you, I’d understand it better if I understood what he means by “income”.
https://wolfstreet.com/2021/04/07/yellen-calls-for-what-i-called-for-years-ago-taxing-large-corporations-on-the-puffed-up-income-they-report-to-shareholders/
It seems to me that he is using “net income” and “earnings” interchangeably, the former being the term that US firms use in their published accounts, the latter being the UK term. The occasional omission of “net” does not really create ambiguity for me