I have read some of the Arculus Report issued by the Tories, particularly with regard to tax.
It is a repeat of their oft repeated mantra: don;t tax mobile capital or it will go away. Let’s re-write that another way: don’t tax the investment income of the rich, put all tax burdens on working people. Much of it comes straight out of the flat-taxers manual. George Osborne has clearly not got over that stage of his development as yet. And they’re still setting up Ireland as a paragon of virtue. The logic that if everyone steals there is nothing left to steal appears to have passed them by.
But there are also some classic comments in there which shows how little those who wrote it knew about tax. I like this one best:
Tax issues can be opened retrospectively.
Seriously: they think that is a problem. So only clairvoyants need apply for jobs with HM Revenue & Customs in future. You have been warned.
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Surely they are right about not taxing that which is mobile? But they could tax real estate especially land instead. Of course they are not going to do that but it is a pity that opponents of tax avoidance neglect the obvious point that if taxation is shifted onto land, avoidance is not an option.
[…] Tax Report 22 May, 2009 — RickB Richard Murphy @ (the splendid) Tax Research Blog summarises- I have read some of the Arculus Report issued by the Tories, particularly with regard […]
Hooray! A Georgist. Yes, a land value tax would be a great idea. Several Nobel Prize winning economists and even Adam Smith recommended it.
As for mobile capital, it should be mentioned that taxes have to be collected somewhere. It doesn’t make much difference to mobile capitalists whether they pay or their employees pay, they are still worse off by the same amount. I doubt their highly paid accountants are fooled. Of course, a land tax would lower the price of land and reduce the investment needed to set up a business. Why would they care if half their income went to tax, if they had set up two businesses for the price of one business anywhere else?