Can We Fire the TUC Please?
No, I mean can we fire all the people who work at the TUC at the moment please?
The cause of my demand is their latest nonsense on the Robin Hood Tax. You know the one, that Richard Curtis thing where if we just took pennies off every financial transaction then we’d have hundreds of billions to make kittens fart rainbows stuff?
The IMF has just released a new report and the TUC is frotting itself into a stupor, for they say that, look, look, the report shows that it is possible!
They then ignore what the report says:
Further, it has been pointed out that the real burden of an
FTT may fall largely on final consumers rather than, as often seems to be supposed, earnings in
the financial sector.9
This is the real problem with the RHT. They set out to tax the banks: but it won’t be the banks that really pay the tax. Not even the bankers or the banksters. It’ll be you and me, the ordinary citizenry, who pay it.
It’s all to do with something called tax incidence: the people who actually hand over the money to the Treasury aren’t necessarily the people who bear the real economic burden of a tax. Sure, it’s the employer that hands over our PAYE income tax to the Treasury but we all agree that it’s us really paying income tax. We might think that employers’ national inusrance is paid by the employer: but to them it’s just another cost of employing someone. They want a job done for £80 (say) and it’s no matter to them if it’s £70 and £10 NI or £80. They’re only going to pay the £80 for the job: so employers’ NI is paid by us, the workers.
Corporation tax is never paid by the company: it might be the shareholders, might be the workers. The more open the eonomy (ie, the more that the investor can bugger off elsewhere with her money) the more the workers pay it and the less the shareholders.
These are all well known (OK, well known to economics geeks) examples of tax incidence. And as I say, the major problem with the Robin Hood Tax on banks and banksters is that neither of them will pay it: we will.
Which makes it a not very good tax at all.