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National Insurance - a tax on workers

The Tories are having a go at the other lot for putting up NICs, again. The other lot point out that the Tories did it when they had a chance. They also point out that unemployment does not seem to go up when the tax is levied.

As Chris Dillow points out, both sides are being characteristically economical with the truth about NICs: because in fact, the incidence of this tax, like all the others, is not born by the intermediaries. Obviously there are questions of whether or not employers can pass on costs, and whether this is in the long run or the short run, but basically corporates do not pay taxes themselves: they pass them on to shareholders, or employees, or suppliers, or someone else. After all, a company is just a formalized scheme of arrangement between various classes of creditor.

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This page contains a single entry from the blog posted on April 9, 2010 3:30 PM.

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