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.
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…..