Agreed that changes to the system should be very carefully considered. Although (as I've said) I don't think corporation tax is done this way just because it's the way we always do it.Digby wrote:I do understand the concern. I am advocating a huge change in how taxation works, and it's a fair concern that political concerns could well derail such an overhaul, and too simply getting the detail righting such a change and not falling foul of the law of unintended consequences is another wholly reasonable concern.Son of Mathonwy wrote:Yes, I can see why putting the corp and income tax take all into income tax would be simpler and better in some ways in theory, but I can't see past those 3 objections of mine, particularly the first.Digby wrote: I'm open to a number of approaches on things like witholding tax. And I'd also note you could combine the current HMRC split on corp. tax and individual tax and just process (go after) the individual. And whilst there are some very rich individuals in the main individuals will not retain teams of lawyers and accountants as do companies to seek to (legally or otherwise) avoid as much tax as possible
Also, another point that occurs to me is that (at least for owner-run companies)) the tax take is smoother over time if it's taken as the profit arises rather than when dividends happen to be paid.
Nonetheless just because it's the way we always do it is a poor reason imo to carry on doing something that is actually designed to stifle productivity, especially because there is anyway seemingly a race to push corp tax rates ever further down and I'd much prefer a considered approach in advance about how tax should be levied fairly than suddenly at some later point in time trying to bolt on new tax levies to recover lower corp tax revenues.
Also it'd remove it as a political tool for the various parties, the Tories often suggest they'll cut rates, Labour suggest they'll bump the back up to cover a number of social spending programmes, and none of that volatility is useful to business, although when even the Tories take the stance of 'fuck business' there's a problem across the board
And it's not designed to stifle productivity - it's designed to raise revenue from those who can most afford it. I understand this can be taken as punishment for success (as can taking more tax from the better paid). But the alternative will damage the weaker participants and ultimately reduce competition by driving them from the market.
Don't be misled by "survival of the fittest" thinking - it works in nature because the fittest merely get to reproduce more, before dying. Corporate survival of the fittest transcribed to the savannah would lead to a single, immortal, mountain sized lion chomping every wildebeest in sight.