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Yea, even this is nonsense

I suspect that inheritance tax cuts will be mentioned today. They may well be one of the many NITMO offerings (‘not in my term of office’), meaning that they will have no impact until after the coming general election, but I think that they are likely to be proposed, nonetheless. The entire benefit will, of course, go to those already wealthy.

The person leaving the estate is dead, so the benefit won’t go to them. It will go to the inheritors. Who, by not having inherited yet, may or may not be already wealthy.

More barkingness.

Since the incidence of corporation tax is almost entirely on shareholders (although there are economists who argue otherwise),

No, the initial incidence is upon shareholders. It’s what happens after that which matters. Imagine a 100% corporation tax upon any new business. Therefore there will be no new corporations. As time passes and labour productivity increases then extant firms will be laying people off. Who now cannot get new jobs at the new companies that don;t exist. So, who is carrying some of the cost of the 100% corporation tax? Workers.

This isn’t in doubt by any economist at all. It’s only the proportions that are discussed.

As I noted when being interviewed on Radio Five yesterday, in my entire career as a practising chartered accountant not one client told me that a cut in the tax rate would ever impact the amount of work that they were willing to do. Firstly, that was because very few knew what that rate was. Secondly, it was because those who were running their own businesses rarely knew precisely what their profits were until well after the time that they were earned. Thirdly, it was because, even if they knew what their income was, their ability to relate that directly to the amount of tax they might pay was decidedly limited because of the complexity of the tax system. In other words, whilst this link between tax paid and effort expended might look to be obvious on an economist’s whiteboard when teaching students, in the real world and with small tax changes the impact is almost certainly non-existent.

Blimey, small marginal changes have small marginal effects. Amazin’ – we’ll have him up to speed with the Marginalist Revolution soon enough, with neoclassical economics!

And aint this a terror?

then what we will be looking at is a Tory tax giveaway to those most likely to vote for them in exchange,

Government does stuff that voters want…..

19 thoughts on “Yea, even this is nonsense”

  1. allthegoodnamesaretaken

    “n my entire career as a practising chartered accountant not one client told me that a cut in the tax rate would ever impact the amount of work that they were willing to do”

    Clearly he has never spoken to an NHS Consultant…

  2. what we will be looking at is a Tory tax giveaway to those most likely to vote for them

    So not much of a giveaway then, as hardly anyone is likely to vote for them.

  3. “in my entire career as a practising chartered accountant not one client told me that a cut in the tax rate would ever impact the amount of work that they were willing to do” – so why did a lot of people change from sole traders to ltd companies,, so they could receive dividends without nic? and why have there been a slew of tax avoidance cases eg https://www.gov.uk/government/publications/tax-avoidance-litigation-decisions/tax-avoidance-litigation-decisions-2022-to-2023 etc etc.

  4. ‘In my entire career as a practising chartered accountant, not one Client rumbled the fact that I had arranged someone else to take the qualifying exams for me, nor did it impact the level of ignorance that characterized my recommendations, or the fees that I was able to charge for my advice’

    Fixed it for him.

  5. “not one client told me that a cut in the tax rate would ever impact the amount of work that they were willing to do”.

    When his clients are even more clueless them him (they had to be to use him as their accountant), that’s hardly surprising.

  6. Another of his budget comments

    “Maybe big business will keep 100% expending [sic] of investment costs as well – which is ludicrous when so much business capital expenditure is designed to undermine net-zero targets.”

    Whut?

  7. Dennis, CPA to the Gods

    As I noted when being interviewed on Radio Five yesterday, in my entire career as a practising chartered accountant not one client told me that a cut in the tax rate would ever impact the amount of work that they were willing to do.

    Why is that? Well, that’s not the sort of conversation clients engage in with their accountants. That decision is personal, and most normal clients don’t pay their accountants money to listen to musings on personal subjects and topics. Being the accountant, you find this stuff out after the fact.

    Beyond that, for most normal people, there is no one thing that drives a decision related to the life/work balance. Invariably, it’s a combination of things. If Spud wasn’t so simple, he’d realize life isn’t as simple as he’s trying to make it out to be.

  8. Hang on tho’, if it’s being offered to get people to vote Tory then to be of benefit in garnering votes it must benefit a large number of people. Isn’t that progressive?

  9. Haven’t we established he mainly worked for various media luvvies so not exactly representative of the business community, most people in that field I’ve met are usually happy to take anything offered and are usually grubbing for work.
    Was listening to Rogan and the Rock interview and the crappy work they did before making it. Touring and working every day for peanuts. Rogan refers to it as fuck you money and is quite open about taking what work you can get until you get to that point and seems genuinely grateful to be in the position he’s in.

  10. Every single business owner, well paid employee and self employed I know takes actions to mitigate tax. Divis not income, company pension contributions, bike to work scheme to name but 3 with massive uptake.
    You’d have to be an idiot to not know that and appoint Murf to do your accounts.
    Plus an accountant who doest say ‘hey you could pay less tax if you did this…’ is worthless.

  11. Maybe one day the realisation will hit him that advising his clients in such a way as to maximise the tax they paid was not such a great idea?

  12. On the whole “not once in my entire career” thing; odds on that any such conversation never, not once, ever, in his entire career, actually happened.

  13. I’m wondering if his clients were all unsuccessful enough to have marginal tax rates putting them on the rising part of the laffer curve. That could explain why he doesn’t believe in the laffer curve. As to why he doesn’t believe in trickle down economics either, I can only presume that he has only ever mixed with tight gits.

  14. “in my entire career as a practising chartered accountant not one client told me that a cut in the tax rate would ever impact the amount of work that they were willing to do”

    Is that something people talk to their accountant about? My father is an accountant – most of his conversations are on the phone ‘yes, I’ve got your documents and expect to be finished by the end of next week’.

  15. “Secondly, it was because those who were running their own businesses rarely knew precisely what their profits were until well after the time that they were earned.”

    Is he saying that things that happen in the past have no effect on what you’re incentivized to do in the future?

  16. “Is he saying that things that happen in the past have no effect on what you’re incentivized to do in the future?”

    I once accidentally fell into the 60%+ tax hole between £100k and £125k, through dint of having been working hard at making money, and not having the time to spend it back on my business, I made damn sure I didn’t do that again the next year, or thereafter.

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