We don’t want to equalise capital gains tax and income tax until we abolish corporation tax.
Yes, I know, incidence of corporation tax. But all the lefties say that’s on the shareholders, don’t they?
Timmy elsewhere
December 23rd, 2012 · 1 Comment
Tags: Timmy Elsewhere
1 response so far ↓
1 FlimFlam // Dec 24, 2012 at 2:54 pm
Corporation tax falls on corporations (unsurprisingly), not on the shareholders. Shareholders pay income tax on their dividends (on which, incidently, National Insurance contributions are not paid)
A corporation is separate from its owners and its managers. It has its own independent existence which survives the death of its owners and/or its managers. It is because of this separate legal existence that a corporation is a taxable unit.
It is not mandatory for firms to trade through a corporation. Firms are free to adopt alternative trading vehicles. Many firms trade successfully as sole traders or partnerships. The existence of corporations indicates that advantages accrue to trading through such a vehicle.
In economics, there is no such thing as a free lunch. The price of incorporation is corporation tax.
Leave a Comment