And note the involvement of Sir James Mirrless – the man who is heading the Institute of Fiscal Studies current pl;ans to reform the UK tax system by shifting all corporation tax liabilities onto VAT so that the burden of tax moves from the wealthiest in society to the poorest.
Sigh. We’ve had both Vince Cable and Larry Elliott pointing out that of course companies don’t actually bear the economic burden of corporation tax. It’s some combination of workers, consumers and investors.
We’ve also had people like the Congressional Budget Office pointing out that in an open economy like the US (and the UK) that burden is carried some 70% by the workers in the form of lower wages.
So the current situation is that, in large part, it is not the wealthiest in society that pay the corporation tax. It is the workers.
Moving that tax burden to VAT might be more regressive…it might also not be. That rather depends upon what portion of goods and services consumed by the poor is subject to VAT and what is not (housing, children’s clothes, food etc are not, heating and energy is a special low rate and so on) and comparing that to the VAT impact upon the expenditures of those with rather higher incomes.
That’s an empirical question which I’m sure someone would be delighted to dig up the answer to….an answer which I look forward to someone telling me.
But if you start out by insisting that corporation tax is paid by the wealthiest when it most clearly is not then anything else you have to say on the subject is clearly going to be wrong: if not just politically motivated blowharding in fact.