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That TUC Tax Report

Friday, 1st February 2008

The TUC has released a report on how much the public coffers lose as a result of tax avoidance: that is, the entirely legal practice of organising your affairs so as to minimise your tax bill. It'll cause all the usual screaming (Polly mentions it today for example) but I would advise paying it no mind.

It's been written by Richard Murphy. A man so monumentally ignorant of the economics of taxation that he denies the existence of tax incidence, a subject so obvious, banal even, that the Wikipedia entry is actually accurate. As regards corporation tax it's pretty simple: companies do not in fact pay the tax levied on their profits. Sure, they hand the cheque over but the actual incidence of the tax is one or more of workers in the form of lower wages, customers in higher prices or investors in lower returns.

When I pointed this out to him on my own blog recently he left this comment:

 

Yes he knows what is claimed

And he knows it is wrong

It is myth that works on the blackborad (sic) and not in practice

In truth it’s promulgated simply to make the wealthiest wealthier

But I guess that is your aim

The views on corporation tax of someone so adamant in ignoring the most basic fact about it really don't deserve further consideration.

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