Eoin is an idiot
Posted by Christie Malry on January 31, 2012 at 12:31 am
Whilst a worker on the NMW pays 13% of his income on direct taxation, Tony Blair Associates paid just 3%. That means than a minimum wage worker paid 333% more tax last year that Tony Blair Associates as a proportion of income.
If you compare the tax paid by a company as a proportion of its revenues against the tax rate paid by an individual as a proportion of his/her income, it's hardly surprising you're going to end up with idiotic results.
A company isn't a person. As I heard only this evening, thanks to a great talk by David Allen Green, it's a legal fiction that's given certain person-like qualities, but only in order to enable it to enter contracts, limit the liability of its shareholders, etc. We tax companies in order to tax their shareholders. But we tax companies on their taxable profits, not their revenues. This is exactly the same way that sole traders and other unincorporated businesses are taxed.
We tax people differently. We tax them on their income, with very little scope for deduction.
So if there's a baddie in this tale, it's the tax system which beats up on the little guy. It's not Tony Blair, who will pay tax on any income he receives personally (possibly in the UK, but possibly not, depending on how he has structured his affairs).
And it's mathematically dishonest to compare the rates paid and shout that one is higher than the other, without taking account of the actual amounts of tax paid. It takes a superhuman quantity of fuckwittery to actually believe that a minimum wage worker pays 333% more tax than Tony Blair's company. It's simply not true, whichever way you look at it.
"a superhuman quantity of fuckwittery
I've yet to hear a more concise description of Éoin.
It's not even a "company vs individual" or a "big guy vs little guy" issue.
It's simply "business vs employee".
A business is taxed on its profits (whether it's big or little, incorporated or unincorporated). An employee is (largely) taxed on his income.
Is that "fair"? Yes, more or less. A business can have expenses that are a large part of its income, an employee generally doesn't. So to tax them both on the same basis of gross income would be unfair.
Mind you, this assumes that the expenses of Blair Productions, or whatever it's called, are legitimate. Who knows? And given the Student Loans fiasco, can we trust HMRC to investigate even-handedly?