Worstall and Guido can’t both be right

Posted on

Guido Fawkes has commented on this blog this morning, saying:

“If the Tories get in business will be decimated.”

Crass and ridiculous. Labour is crushing business with taxes cheered on by you.

He confirmed his belief by adding a further comment, saying:

NI hike for a start.

But his fellow right wing blogger, Tim Worstall argues in a comment also aimed directly at me:

businesses don’t pay taxes. People do.

Come on guys. You need to agree a line. You can’t both be right.

Rather curiously on NI I agree with Worstall.

For much of the rest Worstall is just wrong and Guido’s instincts are right. Whilst on the economic blackboard of so-called rationality Worstall lives by which bears no relationship to reality it is true that it can be shown that a limited company cannot of course pay tax — the reality is that they do change where, when and by whom tax is paid and at what rate — as all tax planning and offshore proves. In which case Worstall is wrong and Guido is right in his instincts about whether companies pay tax — but fundamentally wrong in his analysis.

The simple reality is that wages and earnings have fallen as a percentage of GDP over the last thirty years, profits have risen as a proportion of GDP and tax yield from profits has not risen to match. So labour has been taxed more heavily — as people know — and it’s time for this trend to reverse. Business does pay tax and has to pay more.

Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:

You can subscribe to this blog's daily email here.

And if you would like to support this blog you can, here: