(The continued) Closing of already small and static minds

As regular readers of NP are aware, from time to time we enjoy delving into the "minds", "thoughts" and tortured "logic" of hardcore leftists and statists. As mentioned previously these journeys into the abyss are normally done with the same slack-jawed awe one usually musters up only when viewing the human oddities exhibit at a traveling carnival.

However, as the ideas of the hardcore left seem to move closer into the mainstream of thought (mind you, this mainstream dash is not accomplished by head-on debate and an honest airing of ideas but by oozing underneath the backdoor while no-one is watching) it is much more prescient to take the "ideas" offered by the statists as serious contributions to the actual debate. Do note, the suspension of reality and the understanding of speciousness are key factors when lifting up the rock to observe these "ideas" which scatter and slither in the light of observation.

All of this brings us to one of our favourite reality-phobic leftist touchstones, Tax Research UK (TR-UK). It matters not that this particular "pressure" group of statists are UK-based. The template for this particular group would fit in nicely with the same hard-left statist types based in any country: More government control, more taxes, more spending, afraid of debate, closed-mindeness, and an oddly provincial outlook on life. What the TR-UK types are stammering on about lately should not be a surprise to anyone familiar with statists: More taxes (again), the denial of reality and of course hypocrisy. All familiar ground for the hard-left. Before your eyes glaze over and you scroll furiously, do keep in mind these are the types of individuals who agitate for their narrow world-view to be foisted upon the normal and rational of the citizenry all in the name of that vague notion of "social justice", as defined by the hardcore left naturally. Foisted behind closed doors with other like-minded hand-wringing types with sit around the sewing circle with too much time on their hands and too many eyes on your wallet and purse.

Back to the subject at hand, the latest tax-quest,denial of reality and hypocrisy by TR-UK. TR-UK has spent years denying the reality of a little something that those running a lemonade stand grasp quite firmly, tax incidence. Tax incidence being of course the concept and reality of who bears the economic burden of taxation. The issue comes about as the Guardian is in the midst of an illuminating, for reasons possibly not intended, series of articles on taxation. The usual airing of the bloody shirt, "increase taxes on business!", has the tax-mongers at TR-UK in a fevered pitch of denial. The concept of tax incidence is that of taxes on business being borne by some combination of shareholders receiving smaller returns, labour receiving lower wages, and/or customers paying higher prices. A quite easy concept to grasp for any reasonable, rational and logical individual. Of course it goes without saying that the statists at TR-UK fail to grasp the obvious, as usual. Do not believe the reality of tax incidence by NP, see what the OECD has recently said about the very same topic:

In summary, whether the burden of the corporate income tax falls rather on capital than on labour depends on the underlying model assumptions. The easier it is to substitute foreign production for the home-country’s production and the more mobile is capital, the lower is the burden of the corporate income tax on capital and the higher is the burden on the more immobile production factors such as labour. If capital is perfectly mobile, labour might even bear more than the full burden of the corporate income tax. But if capital is less internationally mobile, then the burden will fall partly on capital. Moreover, if goods produced in different countries are imperfect substitutes, their prices might differ which might imply that the before-tax price of capital is not necessarily the same across countries. Again, even in a small-open economy, capital might then partly bear the tax burden of the corporate income tax.

So, depending on the situation, the sector, the tax regime, and a host of other factors the economic burden of taxation does indeed fall upon some combination of shareholder, labour, and/or customer. The major outstanding question is the percentage of the taxation falling upon the particular actor. TR-UK denies the existence of tax incidence and thus reality. All of which leads us to the third-leg of the leftist stool in this example, hypocrisy.

TR-UK has a long-standing tax fetish with the Channel Islands of Jersey and Guernsey. Two localities which offer a modicum of tax sanity in the storm of never slaked thirsts of other governments (egged on by the likes of TR-UK) for evermore taxation to be paid by the citizenry. TR-UK highlights the introduction of a consumption tax on all goods and services imported into Jersey and Guernsey (the GST). Despite years of denial regarding tax incidence, TR-UK finally sees the light (based in the relativism of an axe-grinding flip-flop to sate the aforementioned tax fetish) and unknowingly admits the introduction of this tax will not be borne by those firms importing but:

What is very clear is that those ordinary people living there (the real residents - not the parasitical ex-pat community who are either there to evade tax or provide facilities for those who want to) do not enjoy a high standard of living. Prices are astronomical. And this move would shift the burden of significant additional tax onto them: most goods and services are subject to the GST. In other words: they would be paying to have the tax evaders in their midst.

Given TR-UKs long-standing and dogmatic denial of tax incidence, how can these ordinary people of Jersey and Guernsey now bear the burden of taxes imposed upon the businesses actually doing the importing? Tax incidence does not exist, just ask TR-UK.

This all to typical example of the ham-handed "ideas" of one statist organisation, TR-UK, is the norm amongst the hardcore left. The more rational and logical among us need to do a little less laughing (as difficult as that is) when the statist crowd begins bleating and trying to run everyone elses life according to the twisted and authoritarian agenda of the hardcore left.