Oh dear, really, one would have expected better than this line:

Business, in a free marketplace, is a force for good. It creates wealth, jobs and opportunity, and pays for our public services.

One way to read that is that without business there is no wealth creation and thus nothing with which to pay for public services. Largely true, although even without a market, free or otherwise, the Soviet Union did indeed create some value. Not much, the public services were crap and so on, but markets and business create more value is the argument, not that they are the only way of creating any.

However, there’s another way of reading that, one which would appeal to Guardianistas, but which is wrong. That it is the taxes paid by businesses on their profits which pay for public services. Leave, for a moment, aside the success of the family firm in not paying very much. Think rather of something called tax incidence. This is the idea that the actual tax burden falls on shoulders often quite different from those of the people actually signing the cheque.

With corporation tax this is extremely important for, as corporations are not physical individuals, they don’t actually pay any tax at all. It must be some combination of people, investors, workers or customers, who actually carry the incidence of the tax. Indeed, the CBO (a neutral and non-partisan organisation) recently published a paper concerning who actually paid the tax in the USA. 70% of it was paid by  workers in the form of lower wages, 30% by investors in the form of lower returns. None of it, not a jot, was actually paid by the companies: they’re just a convenient bank account to take it from, not the people ultimately paying the tax.

Corporation tax, far from bashing the rich, actually does a great deal of harm to the incomes of the workers. We should abolish it.