The ultimate stealth tax

Aug 13, 2008, 03:16 AM

Authors : Mike

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Post date : Aug 13, 2008, 03:16 AM

I have to give credit to our sister magazine The Tax Journal for its opinion article in this week's issue from John Cullinane.
He takes a fairly dry economic subject - who really pays corporation tax? - and cuts straight through it to real life. He debunks the economists' arguments that actually it is employees who pay it, because companies are not real people, and argues that the current corporate emigrations owe more to the peculiarities of the CFC regime and foreign profits taxation than to headline rates.
But it's his comments on the psychology of it that are really spot on:

'In short, I have no idea who really pays corporation tax, but more importantly neither do they.'
'Corporation tax is the ultimate stealth tax, in that no-one knows which real people pay [it].'
'Most of us like public services but few of us like paying tax. Stealth taxation is nature's cure for this problem - a kind of fiscal "invisible hand".'
'If it were abolished, the revenue would have to come from people who knew they were paying.'

Quite right too. Anyway, if companies don't really bear the cost of corporation tax themselves, why do they whinge so much about it...?

The Tax Journal? What AM I talking about?! Return immediately to Taxation.co.uk.

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